Two-thirds of Norwegian oil wealth could disappear

[senheiser]

Two-thirds of Norwegian oil wealth could disappear
Published time: 19 Jan, 2016 15:54
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© Antonio Bronic / Reuters


Cheap oil drags on Norway’s economy
The price of North Sea oil dropped below $28 per barrel last week compared to $110 in June 2014.

Professor Ragnar Torvik from the Norwegian University of Science and Technology (NTNU) says the price change means a significant amount for each individual Norwegian.

“Capital reduction in the public sector is at 2,429 billion kroner, which is 500,000 kroner ($57,000) per resident or two million for a family of four. That illustrates how much the fall in the price of oil reduces wealth,” said Torvik.

Finance Ministry State Secretary Paal Bjornestad declined to comment on the analysis in detail, referring to the significant degree of uncertainty in the long-term estimates of this kind.

“There is little doubt that sustained lower oil prices will eventually have consequences; we will be less rich than we thought. This of course means that we will be putting smaller earnings into the fund and the growth in our expected real return will be smaller,” said Bjornestad.

 

[oprih]

Just like their arab counterparts, once the price of oil goes down, their economy will be in ruins.

 

[nvKyleBrown]

Venezuela is hit worst - they have absolutely nothing but oil to sell outside the country. Norway was a solid enough country before oil, it will be poorer, but not destitute after oil. They've saved most of their income anyhow, and have been very careful to not get too addicted to oil income. Of all the oil exporters, they may be the most resistant to low oil prices.

 

[somebozo]

and there are some people who are overly obsessed with Saudi oil slump!

 

[Providence]

Venezuela is hit worst - they have absolutely nothing but oil to sell outside the country. Norway was a solid enough country before oil, it will be poorer, but not destitute after oil. They've saved most of their income anyhow, and have been very careful to not get too addicted to oil income. Of all the oil exporters, they may be the most resistant to low oil prices.

Just compare the per barrel operating cost of producing oil vis-a-vi it's % of GDP for all the countries. Norway wouldn't be losing much.

 

[C130]

Norway is fine!! its other oil producing countries that rely on the sale of oil I would be more worried about.


Venezuela
Nigeria
Algeria
Ecuador
etc etc

 

[Tshering22]

Just like their arab counterparts, once the price of oil goes down, their economy will be in ruins.

Nordic countries are hi-tech countries with lot of local research and development in various sciences. They may become more prone to living without a resource cushion, but will not end up like Arab countries of the future.

 

[Hamartia Antidote]

Norway is fine!! its other oil producing countries that rely on the sale of oil I would be more worried about.


Venezuela
Nigeria
Algeria
Ecuador
etc etc

yesterday: Venezuela decrees 'economic emergency,' reveals depth of crisis| Reuters

here's where Maduro gets hanged: Venezuela Congress plans to investigate PDVSA, China loans | Reuters

 

[C130]

yesterday: Venezuela decrees 'economic emergency,' reveals depth of crisis| Reuters

here's where Maduro gets hanged: Venezuela Congress plans to investigate PDVSA, China loans | Reuters

 

[A.P. Richelieu]

Two-thirds of Norwegian oil wealth could disappear
Published time: 19 Jan, 2016 15:54
Get short URL

© Antonio Bronic / Reuters


Cheap oil drags on Norway’s economy
The price of North Sea oil dropped below $28 per barrel last week compared to $110 in June 2014.

Professor Ragnar Torvik from the Norwegian University of Science and Technology (NTNU) says the price change means a significant amount for each individual Norwegian.

“Capital reduction in the public sector is at 2,429 billion kroner, which is 500,000 kroner ($57,000) per resident or two million for a family of four. That illustrates how much the fall in the price of oil reduces wealth,” said Torvik.

Finance Ministry State Secretary Paal Bjornestad declined to comment on the analysis in detail, referring to the significant degree of uncertainty in the long-term estimates of this kind.

“There is little doubt that sustained lower oil prices will eventually have consequences; we will be less rich than we thought. This of course means that we will be putting smaller earnings into the fund and the growth in our expected real return will be smaller,” said Bjornestad.

Key is "less rich" which is not equivalent to beeing poor.

Venezuela and Russia on the other hand are going down the drains.

 

[flamer84]

and there are some people who are overly obsessed with Saudi oil slump!

Norway saved most of it's oil wealth and didn't let oil dictate the economy.I even had a thread here showing that Norway was allready the richest per capita country in Europe even from the 30's ,before the discovery of oil,it was no empty deserts with bedouins hunting for food.Thery're nothing like the Arabs,they won't be hit as hard.

 

[senheiser]

Key is "less rich" which is not equivalent to beeing poor.

Venezuela and Russia on the other hand are going down the drains.

dont worry about us we have everything in the country not just Oil and we can produce anything we want, only the Russian traitors who want to visit poor countries like yours have to stay in Russia. Sweden soon enough will end up looking like Afghanistan

 

[waz]

Norway has multiple investments and diversified its economy. Look up the Norwegian Pension fund.

 

[RescueRanger]

It's official, the cost of an oil barrel is now more than the cost of oil.

 

[A.P. Richelieu]

dont worry about us we have everything in the country not just Oil and we can produce anything we want, only the Russian traitors who want to visit poor countries like yours have to stay in Russia. Sweden soon enough will end up looking like Afghanistan

Russia has very little that the world wants, except energy and weapons.
Not aware of a single desirable product coming from Russia,
but You could perhaps enlighten us.

As for Sweden, You are predicting that Afghanistan becomes a model for the world to imitate?
I think that is rather optimistic...