Norwegian Shelf Remains Profitable, EURNOK Breaks Daily Support
- Norwegian Trade Balance falls 11% when compared to 2013
- Norwegian Petroleum Directorate’s commodities shelf outlook remains optimistic
- EURNOK breaks through daily support at 9.000
Declining oil prices have substantially reduced the revenues garnered from Norway’s Commodity Shelf, thereby resulting in a lesser trade balance. However, despite this short term loss in revenue, the long- term petroleum activity outlook remains optimistic.
Down 11%, December’s year-over-year trade balance ended at NOK 337.1 billion. Exports fell by 0.9% (NOK 897.8 bn.) while imports increased by 6.2% (NOK 560.7 bn.). Export growth was impeded by a decline in the trade value of crude oil (-3.0%) and natural gas (-9.5%); combined they accounted for only 55.1% of total merchandise trade—6.1% off 2013 levels. The difference results from an 11% drop in the price of natural gas and a sharp decrease in the value of crude exports (NOK -7.8 billion). In further narrowing the trade surplus, imports increased for traditional transport equipment (7.5%), other transport equipment (13.9%), and consumable goods (+NOK 2 billion).
However, in spite of hampering December’s trade balance, current activity in the Norwegian Shelf remains positive. According to the latest Norwegian Petroleum Directorate report, total production of oil and gas in 2014 was 1.4% higher than in the previous year. Moreover 4 additional fields came into play and 22 new discoveries were made among the North, Norwegian, and Barents Seas. These prospects could yield up to 110 million standard cubic meters of oil. Thus, NPD Director General, Bente Nyland, concedes that lower oil prices could reduce activity levels in the short term, but with proper industrywide cuts should result in robust profitability in the long-run.
EUR/NOK Daily Chart
Chart Created by Walker England Using MarketScope2.0
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.