Oil’s slow global demand growth coupled with expanded capacity and increased production in North American as well as OPEC’s recent refusal to cut output has not surprisingly led to the plummeting oil futures in recent weeks.
The question of what this could mean for global energy markets going forward has been at the forefront for many investors.
Despite the recent upheaval in the market, many leading investors are remaining positive. Carlyle Group co-founder David Rubenstein believes “energy is likely to be a better investment now than at any time in the next five to ten years,” according to Bloomberg.
Rubenstein commented further, “This is a great time to buy, the bottom hasn’t been hit yet. Oil prices will probably stay low for a while.”
Other heavy hitters in the private equity realm are bullish on the energy industry, including Blackstone’s Head of Private Equity, Joseph Baratta. Baratta recently discussed in depth about the challenges and strategies his firm is employing in the oil and energy services markets on Bloomberg Television.
Rubenstein and Baratta aren’t alone in their optimism. A recent survey conducted by the Private Equity Growth Council found that behind technology, GPs believe that Oil & Gas will provide the greatest opportunity for private equity investment over the next twelve months. Although it ranked first in the previous quarter, 21% of respondents believed that Oil & Gas investments were the key place to find opportunities.
Steve Judge, President and CEO of the Private Equity Growth Council, commented that, “We are seeing positive indications for a strong 2015. Within both the private equity environment and the broader economy, there is enthusiasm for investment and putting capital to work in the coming year.”
For more details and results from the PEGGC’s latest survey click here.