The Daily Update - Norway

This week Norway re-elected a centre-right government headed up by Prime Minister Erna Solberg from the Conservatives: the coalition and parties seen to be aligned with it gained 88 seats out of 169.  The Conservatives and anti-immigration Progress Party are expected to form a coalition and minority government reliant on the Christian Democratic Party and Liberal Party for support.

While there might be an initial sense of ‘status quo’ about the result, centre-right parties now control fewer seats and Solberg will now need the support of both the Christian Democrats and Liberals to enact legislation.

The Daily Update - Oil Estimates, Trends, Downgrades and Even Profits

Oil is now close to 6 month highs today, with Brent touching $47 (up over 70% from January’s ~$27 lows) and US WTI reaching $45 per barrel.  This is even above Moody’s Brent forecasts of $43/BOE for as far out as 2018 ($33 and $38 are forecast for this year and next) which were all revised down to these levels on the 21st January earlier this year. At the time this significant $10 downward revision for current oil expectations came after a number of smaller reductions and was perhaps viewed as a line in the sand which if crossed could signal serious concern, not only for oil companies but, for the global economy. Even this low $33 estimate carried warnings that, “Moody’s would be likely to lower this estimate if such an upward trend were not to materialize over the next several months.” Following this fundamental shift a broad range of oil related credits underwent single and multiple notch downgrades across all rating agencies.

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