Norwegian Prime Minister Erna Solberg is breathing easier now that western Europe’s biggest crude producer looks poised to avoid the peril of oil prices sinking below $45 per barrel.
Brent crude, the lifeblood for a nation that depends on petroleum for about 20 percent of its economic output, has rallied more than 40 percent since a Jan. 13 low of about $45. That has eased pressure on Solberg who three days after oil prices reached that low called a crisis meeting with the finance minister and the head of the central bank.
“We could have been afraid of oil prices going even below $45,” Solberg said Wednesday in an interview in parliament. The premier, who this month proposed a revised 2015 budget with record spending of oil revenue, has repeatedly said that while the country needs to start reducing its reliance on petroleum, there’s no economic “crisis.”
A report released today partially backed her view, as mainland economic growth unexpectedly accelerated to 0.5 percent in the first quarter. “We started out this period with the activity level very high, at a peak,” she said, referring to a decade-long oil boom in Norway.
“The cost-level was very high. What we now have is lower oil prices, lower investments and the need to get the competitiveness back. If one of these areas starts to get better, it becomes better for the oil industry too.”
Too Little
Even so, employment growth stalled in the period, for the first time since 2010, and the opposition is now attacking the premier for not doing enough to combat rising unemployment. Crude producers and oil service companies have cut thousands of jobs, sending ripples through the rest of the economy and driving unemployment to a nine-year high.
Solberg’s revised budget has “inadequate” measures to address rising unemployment, Jonas Gahr Stoere, leader of Labor, the largest party in opposition, said in parliament today.
“The government is doing too little, too late to address unemployment,” he said in an interview with newspaper Dagbladet.
Economists are also sticking to projections that the economy will weaken later this year. “Summing up from the demand side of the economy, the underlying pace appears to be clearly weaker than presented by headline GDP figures,” said Marius Gonsholt Hov, an economist at Svenska Handelsbanken AB in Oslo.
bloomberg.com
Brent crude, the lifeblood for a nation that depends on petroleum for about 20 percent of its economic output, has rallied more than 40 percent since a Jan. 13 low of about $45. That has eased pressure on Solberg who three days after oil prices reached that low called a crisis meeting with the finance minister and the head of the central bank.
“We could have been afraid of oil prices going even below $45,” Solberg said Wednesday in an interview in parliament. The premier, who this month proposed a revised 2015 budget with record spending of oil revenue, has repeatedly said that while the country needs to start reducing its reliance on petroleum, there’s no economic “crisis.”
A report released today partially backed her view, as mainland economic growth unexpectedly accelerated to 0.5 percent in the first quarter. “We started out this period with the activity level very high, at a peak,” she said, referring to a decade-long oil boom in Norway.
“The cost-level was very high. What we now have is lower oil prices, lower investments and the need to get the competitiveness back. If one of these areas starts to get better, it becomes better for the oil industry too.”
Too Little
Even so, employment growth stalled in the period, for the first time since 2010, and the opposition is now attacking the premier for not doing enough to combat rising unemployment. Crude producers and oil service companies have cut thousands of jobs, sending ripples through the rest of the economy and driving unemployment to a nine-year high.
Solberg’s revised budget has “inadequate” measures to address rising unemployment, Jonas Gahr Stoere, leader of Labor, the largest party in opposition, said in parliament today.
“The government is doing too little, too late to address unemployment,” he said in an interview with newspaper Dagbladet.
Economists are also sticking to projections that the economy will weaken later this year. “Summing up from the demand side of the economy, the underlying pace appears to be clearly weaker than presented by headline GDP figures,” said Marius Gonsholt Hov, an economist at Svenska Handelsbanken AB in Oslo.
bloomberg.com
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