Energy-efficient businesses and export of North Sea crude are helping Denmark cope with rising Global Crude Oil prices, and experts fear that the current Oil price turbulence may have long-term impacts on the Country's economy.
A sustained price rise could hurt business productivity, household consumption and exports, they considered.
Unrest has disrupted Crude Oil production in Libya, which normally produces some 1.6M BPD.
Global Crude Oil prices have risen, and Brent Crude, the Oil industry barometer, was priced at 110.9 bbl Friday morning.
Jacob Warburg, Chief Economist of Denmark's Foreign Ministry, that the Crude Oil price hike makes Denmark's energy-efficient businesses relatively more competitive, but the Country would also suffer if high prices lead to falling demand for Danish goods.
Proportionally, it will strengthen the competitiveness of Danish companies, but the demand for their products will decline, if world demand declines, he said.
For every unit of production of GDP, we use less energy than our competitors. That means we will not be as hard hit by the rising oil prices as our competitors, Warburg said.
A number of Danish companies have pioneered low-energy consuming technologies in such industries as freight, shipping, and heat regulation and insulation.
According to Danish financial daily Boersen, a study in Y 2009 conducted by the Central Bank showed that the competitiveness of Danish industry increases by 0.25% every time energy prices rise by US$10.
And there is a chance for Denmark to earn big on high Crude Oil prices.
We have a rule of thumb that says every US$10 increase in price per barrel of Crude Oil will mean an increase in public revenue of 3B Danish Kroner (US$550M), said Martin Madsen, Chief Analyst at the Economic Council of the Labor Union.
Madsen based his calculation on the Finance Ministry's estimate that the average price of a barrel of Crude Oil is US$90 in Y 2011. If Crude Oil prices stay high, Denmark could earn a lot more than expected from its North Sea Crude.
Because Denmark is a small-country oil producer and a net oil exporter, it has a positive impact on the Danish budget and on the current account, Madsen said in an interview.
There will also be positive effect on Danish competitiveness, because we use less Oil in production relative to countries we compete with.
Denmark's total revenue from oil production in Y 2011 is estimated to reach 22B Danish Kroner (US$4.05B).-Paul A. Ebeling, Jnr. www.livetradingnews.com