Norway says its economy is in a restructuring phase as it adjusts to prolonged weakness in crude oil prices. File photo by A.J. Sisco/UPI | License Photo
OSLO, Norway, June 13 (UPI) -- Despite a rebound in crude oil prices, the Norwegian government said it expects the economic pressures from the market downturn to linger.
The government said mainland gross domestic product has suffered for seven straight fiscal quarters.
"Despite a 1 percentage point contribution to growth attributable to high electricity production, mainland GDP increased by only 1.3 percent in the first quarter," a government report said.
Crude oil prices are holding just below the $50 per barrel mark, up more than 80 percent from the low point for the year. The recovery comes as global economic growth continues its slow pace forward at the same time that production from some markets fades under the pressure of low oil prices, which are still about 50 percent less than levels from just two years ago.
Statistics Norway said demand pressures on the petroleum industry started to wane at the end of 2013. That, in turn, put negative pressure on the Norwegian economy, which as a main oil and gas exporter to the European market relies heavily on the industry for revenue.
"The downturn in Norway driven by the oil price is continuing, although the oil price has now picked up from the trough in January 2016," a survey said.
Unemployment prospects, meanwhile, remain low, with employment gaining 0.1 percent during the first quarter of the year. The number of people employed in the energy sector, meanwhile, is down 2,300 over the last year.
The overall downturn, the government said, is moving closer to its third year the economy is now moving toward a restructuring phase. Nevertheless, the government said the petroleum era is far from over for the Norwegian economy.
"The petroleum industry will be an important part of the Norwegian economy for many years to come," it said.
The Norwegian Petroleum Directorate, the nation's energy regulator, said oil production in April, the last full month for which data are available, averaged 1.63 million barrels per day, about 3 percent higher than the agency had expected. The government estimates there are roughly 18 billion barrels of oil equivalent yet to be discovered in Norwegian waters. Half of that is in the Barents Sea, with the rest distributed in the North and Norwegian seas.