The declining oil sector and the sharp fall in oil prices since the summer may affect Norges Bank’s decision to lower the policy rate or leave it unchanged.
It can also be a dramatic day on the Oslo Stock Exchange Thursday after the fall in oil prices increased in strength in the hours after the trading day in Oslo was over Wednesday afternoon.
Many companies in the oil and gas sector in Norway waiting for the next round in the oil market after one of the most dramatic days in this trade. Oil prices are now 40 percent lower than last summer.
– Weak demand for energy, even at lower prices, raising concern about the prospect of a global economic growth, says general manager Robert Stein of the investment company Astor Investment Management in Chicago said.
Brent: $ 64
On Wednesday evening was a barrel of Brent crude traded for prices around $ 64 per. barrel. There are over three US dollars deliver than a day earlier. Slump came up in 3.7 percent of Brent oil, while Texas iolje plunged 4.5 percent later in the evening.
The heavier oil products from Texas was Wednesday under $ 61. Price is now at its lowest level since July 2009, according to Bloomberg.
A similar decline has oil market barely seen for years. The fall came after oil prices actually rose moderately Tuesday after continuous fall since the middle of last week.
Organization of Petroleum Exporting Countries (OPEC) downgraded early Wednesday its forecasts for demand for member states oil in 2015 with 300,000 barrels. day to 28.9 million barrels. It is the lowest level since 2003. In the current year, demand from the 12 member countries of OPEC remain at 29.4 million barrels per. day.
Major oil stocks in the US
Later a status from the US Department of Energy told about higher oil inventories in the United States than expected.
Both factors were the fall in prices to accelerate. And oil drop spilled over on the New York Stock Exchange, where the index fell by 1.5 percent during the later hours. Among the biggest losers on the leading stock exchange in the United States was ExxonMobil and Chevron. Wednesday got British Petroleum also has broad coverage in the international media for planned cuts in staffing and investment in 2015.
Dørum: – Pending rate cuts next year
On Thursday’s monetary policy meeting, it becomes clear whether Norges Bank choose to lower the policy rate or keep it at its current level of 1.5 percent. Few believe in rate increase.
Chief Economist Øystein Dørum writes in Dagens Næringsliv Thursday that they estimate that the interest rate cut by one quarter percentage point before next summer.
– We are not alone. Half of analyst corps waiting 1-2 rate cuts next year, the market is pricing in the same Dørum says.
Still, he emphasizes that it is not so obvious that Norges Bank chooses to put down rate already now, despite violently fall in oil prices in recent weeks. Dørum pointing to the fact that Norges Bank and FSA believes growth in house prices and household debt is already on the high side.
– Best to keep a cool head
– Even more debt will increase vulnerability if the changes that are coming, gets tougher and / or more protracted than we now think. Sure enough, this effect can be suppressed by imposing banks increased capital requirements and / or tighten the rules for loan disbursement, but then disappears the also something of the point of cutting, Dørum says.
If the krone would strengthen significantly, house prices and loans decreases more than desired and expected inflation decreases much, it should still might react with rate cuts now, he said.
Overall, seems Dørum nonetheless that the best Norges Bank can do is “keep a cool head, let the cooling real, nor entrust arena fiscal policy.”
Values 250 billion disappeared
The last year has values over 250 billion disappeared from oil related stocks Oslo Stock Exchange, and the decline will continue, said oil analyst.
There is still a drop height, although there have been bad already, says Lukas Daul in stockbrokers ABG Sundal Collier to Dagens Næringsliv.
He believes the 25 oil-related companies that have fallen the most in value this year, can still fall a further 20 percent.
– It varies from stock to stock, but some stocks may still be a significant downside, the analyst said.
On average they have 25 oil-related stocks that have fallen the most on the Oslo Stock Exchange this year, fell 49 percent.
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