The Organization of the Petroleum Exporting Countries (OPEC) countries meet in Vienna to discuss oil production cut to stop oil price fall. Today’s meeting is described as the most important since the financial crisis in 2008.
The reason of the dramtic fall in oil prices is abundant oil production. The twelve member states will discuss possible production cut to regulate the prices.
Barclays and DNB predicts oil prices drop below $ 70 a barrel in the short term if the member states cannot agree on cuts, writes Aftenposten.
Talking to Aftenposten, Nordea chief economist Steinar Juel further notes that the result of the meeting will have a noticeable impact on the activites at the Norwegian shelf, with lower investments especially in 2016 and 2017.
– It will definitely lead to weaker economic growth, says Juel to the newspaper.
He also said that various calculations have shown that oil price may drop till $ 60 per barrel, and this can lead to negative growth in the economy.
It could lead to lower wage households, lead to a fall in house prices and unemployment will rise.
But neither Nordea nor DNB believe that oil prices will remain low in 2015. The two biggest investment banks believe oil prices will be above current levels.
– We believe that households will get a good revenue. The labor market will probably be a bit weaker, but incomes and purchasing power will be relatively good, because revenues will increase more than inflation, says Juel to Aftenposten.