The Oil Drum

Intra-year cycles, of course.

But, full year average price?

I do wonder what will happen, lots of above ground factors with an election year, and still some room for a NEW All Liquids peak.

And here we go.

The price of crude will never go down.

Think about getting paid in BTU's. You'd like that, huh?

Inflation would be dead forever.

When oil goes down, so will the price of beer.

Arkansaw of Samuel L Clemens

When the North Sea drops to MOL,
and Norway is forced to pay or do w/o
we'll see how prudent they are.

OSLO, Norway: A Norwegian whaling boat that sank last month may have been sabotaged, police said Thursday, two days after an Internet posting by anonymous activists claiming to be behind the sinking.

The 89-foot (27-meter) fishing trawler Willassen Senior, used in Norway's hotly protested commercial whale hunts, sank at a wharf in the Arctic Lofoten Islands in the early hours of Aug. 31.

http://www.iht.com/articles/ap/2007/09/13/europe/EU-GEN-Norway-Whaling.p...

Arkansaw of Samuel L Clemens

The Norwegians are conservative and prudent with their finances, unlike certain other nation states, and the prudent course is to budget for the lowest reasonable price.

That is the essential point - that this is a budget not a price prediction. If the price goes higher, then Norway receives a windfall and good for them. But if the price went lower and the budget was planned around the higher number, they would have to either cut services or raise taxes. Now what politician wants to do that? So assume the more conservative number and if you get the windfall, deal with it then.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

The price of oil in Norwegian Krona could go down whilst the price in United States Dollars could go up, substantially.

Alan I agree. It has really amazed me to see how much the dollar has sunk relative to the crown during the last months.
The Norwegian centralbank will probably have to continue with their ratehikes for a while. With that happening there's a real chance that the Norwegian crown could join the Icelandic crown and Kiwi dollar in being targeted by carry traders...

With regards to the oil price expectations in the Norwegian budget, it should probably be mentioned that they have underestimated the oil price for as long as I can remember. You are certainly right that it is a conservative price estimate. Personally I would probably use it as more of a lower bound for the oil price, but of course I am peak oil aware.

The Norwegians are conservative and prudent with their finances

The Norwegian financial prudence you refer to, is rooted in the principle that the Norwegian state should only spend oil revenue equal to 4% of the nominal value of the Norwegian petroleum fund. I believe that they overshot the target in 2003-2005, 2006 was equal to target, from memory, and this year will either be lower or equal to target.
It should be noted that there are certainly people who think the 4% principle is stupid. Everytime there's a problem that is reported in the media, whether the health system hasn't got enough money, or the roads are potholed or something else, there's always someone who is pointing out that the Norwegian state is depositing 300 BILLION CROWNS in the petroleum fund every year. (Yes, they speak in capital letters). It is rarely mentioned that unless oil prices rise, the Norwegian petroleum fortune (petroleum reserves plus financial assets) is just barely enough to pay the pensions of the baby-boom generation.

Best Hopes for Norwegian Gasoline Taxes staying the highest in the world

I certainly hope that too. They did increase the tax for diesel 0.2 Crowns/litre in their budget for 2008. After a rejiggering of the registration taxes for new cars to favor low-CO2 vehicles for this year had produced record sales of diesel-powered vehicles (75% of new car sales in september), there has been much media attention on the unhealthy particulate emissions of diesel-cars. Also the tax on diesel has lagged behind gas for years.

Finally, I do think we Norwegians have burned through our petroleum resources far to quickly. After all, according to mainstream economists, we should pump up and convert our oil reserves to financial assets before the price of oil falls to its long-term inflation adjusted level...

I don't see the problem. They said the price as 73.5 for 2007, and 360Kr(in text) for 2008. I didn't convert, only noting that it would (logically) have to be cheaper than 73.5.

So, I asked, do you think it will be cheaper (year average) than 73.5 for 2008? Or, if you want to specific, do you think it will be $66 year average for 2008?

IMHO, I think the best we could hope for is to hold the line (~75+ ish). But, in the end, I think the average will be over $80, once we hit next summer with record low gasoline stocks(and possibly lower crude stocks).