Europe’s energy shortfall will boost Norway’s currency

The Norwegian krone tends to rise against the euro when crude oil prices are on the upswing. Indeed, the 12-month rolling correlation between Europe’s benchmark Brent crude oil contract and the euro/Norwegian krone currency pair (EUR/NOK) exchange rate has spent most of the 14 years since the 2008 financial crisis in strongly negative territory.

That makes sense. Norway is a prodigious exporter, with an account surplus averaging more than 6% of gross domestic product over the past four decades. Much of this commercial success hinges on selling crude oil, natural gas and refined petroleum to the Eurozone. Germany, the Netherlands and France add up to over a third of...

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