Oeystein Olsen, Norway’s central bank governor, rejected industry warnings that oil at about $100 a barrel is too cheap to support growth in western Europe’s biggest crude exporter.
“We have been quite lucky and we have benefited from relatively high oil prices, $100 per barrel or just above,” Olsen said in a Feb. 28 interview after a press conference in Oslo. “Given other developments all over the world, we should be relatively content if this level remains.”
Statoil ASA (STL), Norway’s biggest crude producer, said last month it would cut planned investments by 8 percent over the next three years as the stagnant price of oil weighs on cash flow. The decision triggered a warning from the government, which owns 67 percent of Statoil, and has said that planned projects must go ahead and that it may seek to attract more competitors.
While the central bank bases its gross domestic product forecasts on economic output adjusted for oil and gas income, Norway’s energy industry feeds through to all areas of its economy. Olsen has said that the government needs to cut its fiscal spending rule, which sets limits on how much of the $840 billion wealth fund can be used, to 3 percent from 4 percent.