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Norway set for divestment in oil stocks as OPEC views demand peak

Sat 18 November 2017 | Back to news list

Norway says that it may sell $35bn in oil and natural gas stocks, part of the country's $1 trillion Sovereign Wealth Fund. Meanwhile, the oil producers group, OPEC, says that a larger-than-expected boom in electric vehicle sales could cause global oil demand to peak and flatten out in the late 2030s..
 
A spokesperson for Norway's Sovereign Wealth Fund (reported by Bloomberg) said that it is considering unloading shares in leading oil companies to guard against drops in crude prices which may occur as the world switches to cleaner and renewable fuels. 
 
Norges Bank Investment Management would not be the first institutional investor to back away from fossil fuels. But until now, most have been state pension funds, universities and other smaller players that have limited their divestments to coal, tar sands or some of the other dirtiest fossil fuels.
 
Norway’s fund is the world’s largest equity investor, controlling about 1.5 percent of global stocks. If it follows through on its proposal, it would be the first to abandon the sector altogether.
 
Norway’s Finance Ministry, which oversees the fund, said it will study the proposal and will take at least a year to decide what to do. The fund has already sold off most of its coal stocks.
 
In its latest World Oil Outlook the Organization of Petroleum Exporting Countries (OPEC) says that if a quarter of the world’s cars have batteries, global oil demand will reach a plateau of about 109 million barrels a day during the second half of the 2030s.
 
The group’s main forecast is still for consumption to increase for decades to come as the electric car fleet expands at half that pace. Yet the inclusion of the faster-growth scenario suggests that it is starting to take the threat of vehicle electrification more seriously.
 
Jason Disterhoft of the Rainforest Action Network, a group which campaigns for fossil fuel divestment, said (reported by Bloomberg): “People are starting to recognize the risks of oil and gas.” 


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