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Friday, October 4, 2024

Oil price dives as do shares, krone

Shares traded on the Oslo Stock Exchange fell another 2.5 percent on Thursday, while the price of Norway’s North Sea crude oil remains in what many analysts were calling a “free-fall.” That, along with fears of higher interest rates in the US, has also sent Norway’ currency, the krone, to its weakest level against the US dollar in years.

The Oslo Stock Exchange (Børsen) took another battering on Thursday, as did the price of Norway’s most important export product: oil. PHOTO: newsinenglish.no

It cost as much as NOK 8.72 to buy one US dollar on Wednesday evening. The krone strengthened slightly on Thursday but was still trading at NOK 8.69 against the dollar and NOK 9.92 against the euro. It also cost nearly NOK 11 to buy one British pound.

Stock markets around the world have been sliding, wiping out much or even all of the gains logged earlier in the year. In Oslo, some analysts and investors now think some shares are downright cheap. prompting Jan Petter Sissener to do som buying. Newspaper Dagens Næringsliv (DN) reported that the fund he manages, Sissener Canopus, is down 4 percent so far this year so he’s doing some bottom-fishing.

“The market is steered by liquidity in a short term perspective, and it’s on its way out,” Sissener told DN. “Then we join the decline before it goes up again. It’s fun to by cheap shares.”

He said the past year has been exhausting “because the main driver of the market’s short-term movements (US President Donald Trump) sits and tweets half the night and you never know what you’re going to wake up to. I think the uncertainty is the most difficult.”

The sharp drop in oil prices, from more than USD 80 to just USD 55 per barrel on Thursday afternoon, is hitting the krone hardest. It’s been a long time since it’s been as weak as now, good news for some exporters but not so good in the long term.

Even though Norway’s central bank has signaled a slow but certain rise in interest rates in the years to come, DN noted that the market isn’t sending the krone in the same direction. Some analysts think the situation can quickly turn around, though. Investment bank Morgan Stanley believes the krone will strengthen against the US, Canadian and Australian dollars, along with the euro by the of next year.

newsinenglish.no staff

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