Tuesday, 26 April 2016 10:18

Chart Of The Day: Oil Prices And Norwegian Currency

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In the recent past, I have written few articles under the “Focus Norway Edition” and the idea behind those articles was to analyze the Norwegian oil & gas industry and its impact on the economy. While it’s clear that the energy industry plays a crucial role in economic growth and prosperity, the chart of the day further underscores that view.

The chart below shows oil price trend (monthly) since January 2010 and it has been plotted with NOK-USD exchange rates for the same period (January 2010 to March 2016).

 

Oil Price Movement Compared With Norwegian Currency Movement

 

The chart is self explanatory and clearly shows that as oil prices decline, the Norwegian currency also depreciates and vice versa. While the chart is plotted with NOK-USD, the trend is largely the same for NOK against other currencies as well.

This underscores the huge importance of the oil & gas industry for Norway and as oil gradually trends higher, I expect positive movement in the currency along with relatively positive economic developments.

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