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Norway to lose USD 21 million billions - NRK

Gasoil News - Published on Fri, 16 Nov 2018

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Since the beginning of October, the price of North Sea oil has fallen by around USD 17 per barrel. This is tantamount to a daily loss of USD 21 million for Norway. While Norway is one of the top investors in high tech and "green" innovations, Norway's economy remains heavily reliant on oil and gas extraction and at the mercy of fluctuations in global oil and gas prices. According to the national budget, a mere USD 1 drop in global oil prices per barrel implies a loss of USD 470 million for the state revenues.

NRK listed five reasons for the plummeting prices leading to a drop in revenues. First, higher production from OPEC and the US, which have both flooded the market with oil. Second, the US has given more countries waivers from its anti-Iran sanctions. The more countries are allowed to import Iranian oil, the more saturated the marked becomes. Third, pundits predict lower demand, which will push the prices further down. Fourth, US President Donald Trump's tweeting that oil prices should be lower, which is interpreted as the US opposing measures to raise the price.

?Fifth and last, many speculators guessed wrong about the direction the market is heading, and are now desperate to sell. This is pushing the declining oil price further down.

According to NRK, the annual effect of this will amount to NOK 64.5 billion ($7.5 billion). This corresponds to approximately NOK 5.4 billion ($640 million) a month or NOK 177 million ($21 million) a day.

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Posted By : Joykumar Irom on Fri, 16 Nov 2018
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