NORWAY – The Norwegian central bank says higher oil futures prices have led to a “substantial” increase in the expected value of Petroleum Fund.

Norges Bank noted the impact of the “sharp” rise in oil prices since mid-2004 on the appreciation of the krone – and that high futures prices suggests spot prices are expected to be “markedly” higher in the future.

“In isolation, this has contributed to a substantial increase in the expected future value of the Petroleum Fund,” Norges Bank said in its new inflation report.

“At the same time, the price rise has generated increased interest in Norwegian equities in relation to foreign equities.”

And the bank, which runs the Petroleum Fund, added that new occupational pensions standards will increase employers’ costs.

“From 1 January 2006, the government will introduce minimum standards for occupational pensions for all employees that do not already benefit from more favourable schemes,” the central bank said.

“Our projections for wage growth are based on the assumption that the introduction of a compulsory occupational pension scheme will increase companies’ average labour costs by an estimated ½ percentage point.”

The bank has also disclosed that it would buy foreign exchange equivalent to NOK360m (€45m) per day for the Petroleum Fund in July.