Oil must rise above $50 a barrel if the energy sector is to attract the investment needed to build enough capacity to meet future demand, according to new analysis.
Consultancy firm Oliver Wyman said in an annual energy outlook that oil “does not work” at $50 a barrel with the price needing to be at least $65.
Francois Austin, head of energy practice, said: “Change has become the new constant in the energy industry, with continuing pressure from record low sales, an excess of supply and not enough
global demand.”
The firm said in the report said the energy industry would need new strategies to overcome significant challenges including from both regulatory and environmental frameworks.
It said: “Unprecedented shifts are forcing oil and gas companies, utilities, governments, investors, regulators and even consumers to rethink basic assumptions that have guided the energy
sector for decades worldwide.
“To stay ahead of the profound transformation under way, business and government leaders must forge new strategies, operating models and risk mitigation tactics.”
Around one million barrels per day were also forecast as the necessary demand for growth.
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