0215 GMT January 23, 2020
Western Europe’s biggest oil and gas producer was forced to make its first ever withdrawal from the fund it built from its petroleum riches in 2016, after crude prices collapsed, Bloomberg reported.
After the market recovered, Norway was able to return to depositing petroleum income into the fund starting in June 2018, and has had positive flows each month since.
The August withdrawal comes as a surprise because the government said in its revised budget in May that it expects to deposit a total of 34 billion kroner in the fund in 2019. The withdrawal brings net deposits through August to 19.9 billion kroner, putting the government slightly off track to reach the goal for the year.
It’s not yet clear why the government made the withdrawal, and the Finance Ministry wasn’t immediately able to comment. But benchmark Brent crude hit a seven-month low of about $56 a barrel in early August amid concerns over the impact of trade wars and slower global growth on oil demand.
That’s well below the government’s estimates in the revised budget, which assumed oil prices of between $67 and $70 a barrel between August and the rest of the year, bringing the forecast for the annual average price to 559 kroner a barrel, or about $61 a barrel at exchange rate.