No longer different country – Aftenposten

No longer different country – Aftenposten

– This week we saw oil prices down 45 dollars, and there are no signs that OPEC will step in and regulate the price. What does it mean?

Ever since the beginning of the 1970s, OPEC has tried to keep oil prices high by controlling supply. High oil prices has made several offers from non-OPEC countries have come on the market, as American shale oil. When the price of oil has fallen OPEC countries, especially Saudi Arabia, made it clear that they do not want to take the brunt of reducing production.

– Who are most affected by this?

– Low oil prices affects different countries differently, depending on how expensive it is to extract oil. It is believed that Russia will be hit hard, and Iran, and there are conspiracy theories suggesting that the US and Saudi Arabia is party to frame these. But the main thing is that Saudi Arabia wants a large share of the market. To avoid shortage of new offers, can not price will be too high.

– How can it have consequences for Norwegian municipal?

– It makes for Firstly consequences for the oil sector and for anyone who delivers to the oil sector, and secondly for the state, which have a lower income. Meanwhile, oil prices fell given a weaker dollar, which could lead to higher inflation and weaker purchasing power. Lower activity in the economy may lead to lower tax revenues for municipalities.

– Are you worried?

– No, not yet. Both Norges Bank and Statistics Norway’s forecasts are quite undramatic. But if current oil prices stabilize at this level the effect can be greater than we envisage now. We can not exclude that also weaker growth in the world economy contributes to low oil prices. The period of strong growth for China is over, and we see that the demand for other commodities, such as copper, decreases.

– Finance Minister Siv Jensen told us this week that the Norwegian economy is at a turning point. Does she right?

– Yes, in the sense that the peak of oil investment probably behind us. Oil investment has given strong growth impulses to the Norwegian economy, and is what has made us “different country”. When it ends, we get a negative impulse that can reverse this trend, with weaker growth and higher unemployment as a result.

– Governor oriented Prime Minister about the situation this week. What can come out of it?

– It’s probably a pure orientation meeting. It is too early to make any decision should a package of measures to stimulate Norwegian economy already now. It is still unclear what level the oil price is going to add watch, and it makes sense to see the little. It would hardly be necessary with some eventual stimulus package before the revised National in May. But it is highly advisable to start thinking about it.

Published: 17.jan. 2015 9:35 p.m.