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The value of the oil fund ranged from about NOK 7 900 billion in March to NOK 8 700 billion in August, a difference of NOK 800 billion.
The reason is that there have been several minor corrections in the markets during the year. In addition, the exchange rate of the krona has varied.
"The increased turbulence in the markets is obviously leading to a bigger gap in the estimate of what the fund will be in a year," oil fund manager Yngve Slyngstad told E24.
At the time of writing this article, the fund was worth more than $ 8 trillion, following a stock market plunge in October.
"When we update our risk data, we are ready to suffer a significant drop in the value of the fund in the next 12 months," Slyngstad said.
The value of the fund has risen sharply in recent years and for the first time exceeded NOK 8 000 billion in April 2017.
The huge growth has also allowed the government's oil bills to increase significantly to around NOK 231 billion in 2019, or 2.7% of the estimated value of the fund.
The years with the highest growth in the value of the crown of the oil fund:
2014: NOK 1,393 billion
2013: NOK 1.222 billion
2015: 1.044 billion
2017: 978 billion
2012: NOK 504 billion
2010: NOK 437 billion
Source: NBIM
Finance Minister Siv Jensen, however, assumed that the value of the fund would rise to NOK 8.7 billion in the new year.
Instead, if the value is $ 8.1 trillion, its use of oil money will represent 2.85% of the fund's value, that is, closer to the ceiling of three for cent of the value of the fund used each year by the government.
Nine quarters out of ten more
At a press conference held on Friday, the fund's director said that Norwegians could expect that savings in the fund would continue to increase only after the fund had recorded many good quarters lately.
"Now nine of the last ten quarters have had a positive return.It's unusual," Slyngstad said.
The beginning of the fourth quarter may indicate that the value of the fund may fall in 2018, which would be the first time in 16 years. The oil fund was worth $ 8,488 billion at the beginning of the year.
"We have to be ready to get as good a return in as short a time as we could get a few quarters or years with a significant negative return," Slyngstad said.
The only year in which the value of the fund has fallen so far is 2002, when it only dropped by 4 billion. All other years, the value of the fund has increased.
Even in 2008, when the fund had received a return of minus 633 billion NOK due to the fall in equity after the financial crisis, the value of the fund had increased. The reason was that the government had high oil revenues and saved in the fund and that the crown was weakening considerably.
See the warning signs
Slyngstad posted positive returns in the second and third quarters of this year, after a slight click in the first quarter. But he sees warning signs in the market, because it was mainly US stocks, which allowed the fund "mountain" to return in the third quarter.
"Virtually all of our returns come from a good equity return, and most of them from US stocks," Slyngstad said.
The Fund's US equities returned 7% during the quarter, while European equities returned 0.7% and Asian and Pacific equities returned 0.4%.
The head of the Petroleum Fund interprets this as a warning: there are fewer and fewer countries that are doing well and fewer and fewer sectors in countries that are doing well. This may indicate that the market has an evaluation problem, according to the fund manager.
"This could be a warning sign that you should think about valuing the entire market," Slyngstad said.
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