Reuters Summit-PREVIEW-Economy, environment muddle oil outlook

By Bruce Nichols

HOUSTON, May 29 (Reuters) - A global economic downturn, lower but lately rising oil prices and an aggressive U.S environmental agenda have made for one of the most bewildering energy investment landscapes in decades.

Oil prices whipsawed from nearly $150 a barrel to $30 a barrel in a matter of months and have climbed back up around $65, amid signs of economic recovery that could revive demand.

But big oil companies like Exxon Mobil (XOM.N: Quote, Profile, Research) say it's still too early to declare an end to the economic slump and the first plunge in world energy demand in a quarter century.

"The price collapse was so sudden that a lot of them got caught flat-footed," said Nauman Barakat, senior vice president of Macquarie Futures USA.

"They're going to be a lot more reluctant this time around even if prices jump back to $70 or $80," Barakat said. "The concern will be, 'Is this going to be fleeting or a little bit longer lasting?'".

Meanwhile, the Obama administration has been pushing U.S. climate, alternative energy and fuel efficiency proposals that could fundamentally change the sector's economic equation.

"The biggest market for fossil energy in the world is about to become the second biggest market for emissions allowances in the world," said Kevin Book, a managing director and senior analyst at ClearView Energy Partners LLC.

Obama is asking Congress for the first-ever U.S. limits on heat-trapping carbon dioxide emissions as well as fuel changes to reduce vehicle emissions. "It changes your price structure," Book said