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  1. #1
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    Jul 2012
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    Geopolitics and Oil Prices - The Norway Protests

    I've been following with great interest the events taking place in Norway and the oil worker strike.
    The developing situation is the perfect example of geopolitical risk.
    While all eyes were on the Middle East to see how sanctions deadlines played out, the oil price didnít budge an inch. Any trader worth their salt would claim they had that one comfortably priced in; but when a bunch of fed-up workers in Oslo demand retirement at 62 with full pensions rights, the oil price shot straight back to $102/b. We now face the prospect of 2mb/d of high quality, low-sulphur Norwegian production being shut in. Truly explosive stuff for the supply-demand balance. No one saw it coming.

    The strike has already clipped Norwegian output by 15% with nine platforms being taken offline.

    What the US failed to conjure over Iran Ė it could now get over Norway Ė the IEA will release emergency reserves thanks to a pension dispute in the highest ranked nation on the UN human development index, with a vast $600bn sovereign (read pension) fund in the kitty.

  2. #2
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    Jun 2012
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    You mentioned it above but it's important for people to understand it's not just the volume of oil affected by the strike - but the quality. Norwegian crude is of exceptional high quality.

  3. #3
    Senior Member
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    Apr 2012
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    Rainman, my understanding is only a 1/4 million bpd have been removed from the market place...

    They should have the French Unions representing them and they could shave two years off the retire age...

  4. #4
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    Jul 2012
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    Han's you're right - i got norway's total output muddled with the effected output from the strike. Still geopolitical red herrings are something that traders just can't factor into the price.