Norwegian oil investments for 2018 likely to be revised upwardly – Nordea Bank

The first quarter of 2018 oil investments survey is expected to show a robust rise in Norwegian oil investments, noted Nordea Bank in a research report. The expectations are expected to affirm the central bank’s view of hiking key interest rate by the end of 2018.

The oil investment survey, which is set to be released next week, would be one of the most significant figure before the Norges Bank’s March rate path. The fourth quarter survey showed a decline in oil investment in 2018 by 4 percent while Norges Bank projects a rise of 6 percent. Oil investments account for 6 percent of mainland GDP so the difference has significant implications for growth and therefore the rate path.

The reason why the central bank expects higher growth is that several new field developments, which might lead to investment activity in 2018, were not included in the fourth quarter survey. Most of these fields would now be included in the survey. These should raise the figure for new field developments in 2018 by NOK 15 billion to 20 billion to be consistent with the central bank’s forecast. The list of possible, but not included, new field developments indicates toward an upward revision in line with Norges Bank’s projections.

“In sum, we expect an upward revision of total 2018 oil investments in line with Norges Bank’s forecast”, added Nordea Bank.

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