China’s currency adjustment creates fear of falling demand. Talking to Dagens Næringliv (DN) chief economist Kari Due-Andresen believes Norway is highly fragile in this picture.
– When Chinese currency depreciates, it becomes more expensive for China to import. It can affect oil demand further. And this is terribly bad news for Norway, she says to DN.
She expects oil prices will remain low for a long time until 2017.
Oil analyst Torbjorn Kjus from DNB Markets also expects a strong fall in oil price as a result of China-shock. Kjus thinks that the price of a barrel of oil can drop down to 30 USD.
The current level is around 50 USD a barrel, half from last August. This is a somewhat new situation compared to the one we had at the start of the year. Many had thought oil prices found a bottom level, writes DN.
The ripple effects from the drop in oil and gas prices has already been more extensive than previously envisioned. Now it may cause a real blow for the Norwegian economy, admits Due-Andresen.
– Lower oil prices can cause a faster increase in unemployment, says she.