Discussion Note on petroleum wealth and oil price exposure of equity sectors
28 November 2017
The Discussion Note underpins Norges Bank’s advice to the Ministry of Finance to remove oil and gas stocks from the benchmark index of the Government Pension Fund Global.
The advice was given in a letter to the Ministry of Finance on 16 November 2017.
In this note, we analyse the short- and long-term co-movement of equity sectors with oil prices. We discuss how Norwegian petroleum wealth is exposed to a permanent oil price decline through sectors that co-move with oil prices.