Oil prices are buoyant, oil major earnings appear to be looking up, but the oil industry is still entering an "age of restraint" rather than expansion, according to the co-head of European equity research at Goldman Sachs.
"Oil is going through a complete transformation, we think it's entering a whole new phase in the investment mega-cycle — what we call the 'age of restraint' as opposed to the 'age of expansion' that we've seen in the first decade of the 2000s," Goldman's Michele Della Vigna told CNBC's "Squawk Box Europe" on Thursday.
Della Vigna said the "restraint" was seen in the investment sphere and that would create a gap in production in the years ahead and a "very, very tight market in the 2020s." He said consolidation "is absolutely a key component of this stage in the cycle," but did not mention specific cases where this might happen.
Oil market watchers continue to watch a gradual recovery in oil prices after a prolonged period of low oil prices due to a glut in global supply and lackluster demand. The slump in oil prices hit oil majors hard with many cutting back on investment in long-term projects amid an uncertain future for oil prices.
Analysts like Della Vigna are warning that a lack of investment now could hit the industry and consumers later down the road.