From An 800-Year Low To A 16-Year High: Interest Rates Matter For Energy

Three years ago, interest rates hit an 800 year low, if you believe the interest rate mavens after having declined steadily for 42 years. Just recently, interest rates hit a 16 year high. Something of interest to bankers, investors and financiers? Yes, but also of importance to the energy industries.

Here is how.1.  The rise in interest rates changes the investment horizon of oil and gas companies— During the long period when borrowed money cost almost nothing, energy companies could commit themselves to long-duration projects that would…