Norwegian Q2 oil investment survey slightly on weaker side for 2018

The second quarter oil investment survey was slightly on the weak side at least for this year with a downward revision from NOK 160 to NOK 156.5. That survey indicates growth in oil investment at around 5 percent this year compared with Norges Bank’s forecast at 7.4 percent.

The 2019 figure is difficult to interpret. According to the current plans, investment would be NOK 155.5. However, the figure would be most likely to be upwardly revised, noted Nordea Bank in a research report.

“If we compared it with Q2 forecast for 2018 given last year it is up 8 percent which is very close to Norges Bank’s forecast. However the upward revision of the 2018 figure has been rather stronger and it might optimistic to expect the same upward revision of the 2019 figure”, stated Nordea Bank.

The figure given for exploration is also very high and might actually be downwardly revised which it often is. Meanwhile. Statistics Norway mentions a lot of new project not yet covered by the survey which most likely would give higher activity next year. Lately, oil prices have increased as well, which argues for higher investment. Overall, Norges Bank might keep its 2019 forecast.

The survey shows that growth in oil investment slightly on the downside to Norges Bank’s forecast in 2018. However, 2019 might be more in line.

“The effect of say 2 percent lower oil investment in 2018 will not have a very strong impact on Norges Bank’s view on mainland GDP and we doubt this will challenge the forecast for a hike in September 2018”, added Nordea Bank.

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