Hundreds of billions of pounds could be wasted over the next decade on oil projects that do not make sense financially or for the climate, experts have warned.
Many higher cost oil extraction schemes, such as tar sands in Canada, deep water drilling and Arctic exploration, involve gambling on a high price and high demand, the study by the Carbon Tracker Initiative said.
But with the oil price tumbling twice in the past decade and potential constraints on the amount of fossil fuels that can be burnt to keep global temperatures from rising to dangerous levels, investment could be wasted.
The research identified 1.1 trillion US dollars (£650 billion) of potential capital expenditure up to 2025 which require a market price of more than 95 US dollars per barrel to generate value.
Although the Brent oil price is currently 107 US dollars, the study warned that prices had dropped to below 50 US dollars twice in the last decade, and betting on an oil price of more than twice that level could be risky.
The study said that if the world is to limit global temperature rises to no more than 2C, the level above which the dangerous impacts of climate change are expected to be felt, there will need to be a significant reduction in demand for oil.
The whole "carbon budget" for oil - the amount that can be burned and still keep the world from exceeding the 2C target - could be used up by exploiting cheaper oil sources with a market price of no more than 75 US dollars per barrel, the report said.
Demand for oil - much of which is used for transport fuels - could also be reduced by improvements to technology and more efficient vehicles. A slowdown in growth in China was leading to lower demand than predicted, the experts added.
The report urged investors to challenge oil companies on the investments they were making.
High-risk schemes were " prime candidates for cancellation, especially given that they would also take our civilisation towards dangerous levels of climate change", the report said.
James Leaton, research director at Carbon Tracker, said: "This risk analysis shows that many oil companies are betting on a high demand and price scenario.
"Investors need to get ahead of the carbon supply cost curve to ensure capital is not being wasted."
Nick Molho, head of climate and energy policy at conservation charity WWF-UK, said: " Today's report report shows that a significant amount of investment being made in new oil projects today are neither economically nor environmentally justifiable.
"It also highlights the fact that many oil companies are gambling not just with investors' money but also on a world that will experience dangerous levels of climate change.
"The work of Carbon Tracker, the growing global divestment movement around fossil fuels and the increasing willingness of investors to challenge companies on this issue shows that the game is up. We cannot bet on a future that nobody wants."