Oil Losses Force Norway to Consider Measures to Back Economy
Norway is considering tapping reserve funds to shield westernEurope’s biggest oil producer from the worst slump in crude prices in more than half a decade.
Prime Minister Erna Solberg said the government is now “on alert” to respond to the rout. “If the economic situation requires it, we can react quickly,” she said yesterday at a conference in Oslo organized by Norway’s confederation of industry.
A 56 percent plunge in the price of Brent crude since a June high has undermined Norway’s currency and beaten back its stock market. The krone has lost 20 percent against the dollar over the period. Norway’s benchmark equity index is down 9 percent. Oil producers including the country’s biggest,Statoil ASA (STL), and service companies have already cut thousands of jobs to adjust and unions are calling for government measures to protect the industry.
“The decline has been stronger and gone faster than we had expected,” Eldar Saetre, chief executive officer of state-backed Statoil, said yesterday in an interview. “The development we’re seeing is a reminder that we’re in a cyclical industry, and that we need to have a cost level in this industry that can sustain these types of cycles and let us be competitive over time.”
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