Global| May 18 2005Huge Role for Oil & Equipment in Norway Trade
Summary
Perhaps it goes without saying that energy production is a major part of the Norwegian economy. But balance of trade data, which were reported today for April, underscore that fact dramatically. The total balance of trade is seen to [...]
Perhaps it goes without saying that energy production is a major part of the Norwegian economy. But balance of trade data, which were reported today for April, underscore that fact dramatically. The total balance of trade is seen to be a surplus of NKr27.6 billion in April, up from March's NKr25.9 billion and a monthly average of NKr20.1 billion. The petroleum sector more than accounts for the surplus, as apart from it, the trade accounts run deficits, the latest at NKr7.3 billion. The energy sector exports were NKr22.0 billion in April, a little more than 61% of total exports.
"Energy sector" is a term we apply to the Central Statistics Bureau's listing of "crude oil, natural gas, ships and oil platforms". Norway is unusual among oil exporting nations in also constructing the transportation equipment and the water-borne drilling rigs. In April, these exports were a mere NKr28 million, but when even a single rig or ship is delivered, these exports can spike to NKr2 or 3 billion.
The price of energy, of course, also plays a major role in the reported amount of energy-related exports and thence the overall trade surplus. In the second chart, the close comparison is readily apparent. There, we used the balance of trade converted to US$, plotted with the price of Brent crude. The correlation is a very tight 91%. The correlation with the balance expressed in Kroner is still 84%.
Data for Norway are included in Haver's "NORDIC" and "G10" databases. Conversions to US dollars and some seasonal adjustment is performed in the series contained in G10/Norway.
| Norway Millions NKr |
Apr 2005 | Mar 2005 | Apr 2004 | Monthly Averages|||
|---|---|---|---|---|---|---|
| 2004 | 2003 | 2002 | ||||
| Trade Balance | 27,605 | 25,943 | 20,326 | 20,133 | 16,639 | 16,377 |
| ex Energy Sector* | -7,264 | -6,632 | -6,771 | -7,876 | -6,314 | -5,751 |
| Exports | 57,081 | 54,166 | 44,956 | 47,298 | 40,245 | 39,413 |
| ex Energy Sector* | 22,045 | 21,433 | 17,816 | 18,809 | 16,800 | 16,663 |
| Kroner/US$ | 6.3199 | 6.1972 | 6.9242 | 6.7412 | 7.0800 | 7.9839 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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