Norway's oil fund shrinks by 6.5% despite record-high energy prices

Published: Wednesday, April 16, 2008

Norway's oil fund shrank to 1.947-trillion crowns (US$387.3-billion) in March, extending a four-month slump during which it has lost 6.5% of its value, preliminary central bank figures showed yesterday. The decline, which comes amid turmoil on global financial markets, has occurred despite record-high energy prices that have boosted Norway's revenues from oil and gas activities and monthly transfers to the wealth fund. The Government Pension Fund -- Global, Europe's largest equity investor -- fell by 1.2% in the month of March from 1.971-trillion crowns in February. It has lost 136-billion crowns from a peak of 2.083-trillion last November, according to central bank balance sheet data -- an early estimate of the fund's value. The central bank-run fund has said that it lost heavily on security-backed U.S. bonds and on market volatility in 2007. Some of the losses were also caused by currency fluctuations as the fund invests abroad and reports in Norwegian crowns.