The Investment Outlook for the Canadian and US Oil and Gas Sectors suggests that the industry's future profitability is an important determinant of capital investment rates and employment trends. The decline in profitability of Canadian oil and gas companies post-2014 led to a collapse of domestic investment in the sector, and the decline in profitability was linked to a drop in crude oil prices and pipeline capacity constraints. However, there has been a recent recovery in crude oil prices, and economic activity in the upstream segment of the industry in the US and Canada has increased. The authors suggest that financial metrics can be used to evaluate the investment outlook for the Canadian and US oil and gas sectors.
