converge back to levels closer to 2 %. in practice, this means that by clarifying our reaction function in this way, markets were able to better anticipate our actions, thereby enhancing the effectiveness of policy by frontloading the required accommodation. this has not always been a gentle ride as i will explain in a minute but i think it is fair to say that the state - contingent leg of app forward guidance has supported and continues to support the important price discovery function of markets. overall, therefore, the combination of time and state - contingent forward guidance has been highly instrumental in supporting powerful portfolio rebalancing effects and a compression of term premia, and in turn has led to a broad - based easing of financial conditions. i think the evidence speaks for itself. euro area bank lending rates to firms have fallen by some 80 basis points since we started purchasing covered bonds in october 2014, a step which was succeeded shortly afterwards by purchases of asset - backed securities ( abs ) and government securities. ecb analysis attributes a significant portion of this fall to the workings of our asset purchase programme. 11 and effective forward guidance on and implementation of the app may have also helped to 4 / 10 bis central bankers'speeches reinforce forward guidance on rates – a channel famously labelled the “ signalling ” channel. the argument goes that large - scale bond purchases would be perceived by markets as preventing policy - makers from raising rates quickly, as this would cause losses on central banks ’ balance sheet. in other words, central banks purchasing assets “ put their money where their mouth is ”. at the same time, i will not deny that communication on policy intentions has been, and remains, challenging and that we cannot always be sure how our forward guidance works. much of the challenge arises of course from the fact that communication is not a one - way street as i alluded to before. there is an interaction between central bank communication and financial markets which creates a well - known risk that financial conditions would become de - anchored. paul samuelson famously compared the central banker who reads too much from movements in the bond markets to a monkey who “ discovers his reflection in the mirror and thinks that by looking at the reactions of that monkey – including its surprises – he is getting new information ”. 12 let me explain by giving you two concrete examples. the first one refers to our decision of december 2015, when we announced a substantial package of policy measures, including a six - month extension of the app, a 10 basis point cut in the

it has been close to usd 50 per barrel. oil futures prices have also increased. little excess production capacity in opec countries, combined with the prospect of lower production in non - opec countries, has probably influenced oil prices. at the same time, there are prospects of continued strong demand growth in important oil - importing countries, such as china and some other emerging economies. diminishing petrol stocks in the us and fears of petrol shortages this summer have contributed to fluctuations in oil prices in the past month. plans for large - scale development projects resulted in strong growth in petroleum investment in 2004. as a result of persistently high oil prices and expectations that oil prices will remain high, investment in the petroleum sector may reach record levels this year. the investment intentions survey for the petroleum sector points to very high growth. the level is expected to remain high throughout the projection period. activity in the petroleum sector will have spillover effects on the mainland economy, initially on the shipbuilding industry and the construction sector. the scale of petroleum investment and its spillover effects are highly uncertain. the last time petroleum investment showed a sharp increase, in 1997 / 1998, growth was substantially stronger than had been assumed. an upturn occurred in the norwegian economy as a whole at the same time. the unexpected increase in petroleum investment contributed to an economic upturn that was substantially stronger than projected. if oil prices rise further or remain at the current high level for a long period, petroleum investment may again amplify the cyclical upturn to a greater extent than projected. inflation among our trading partners is expected to be low in the next few years. it is likely that high prices for oil and other commodities will continue to push up prices for goods where wages account for a small portion of total costs. on the other hand, growth among most of our main trading partners will probably be too low for idle resources to be utilised in the next few years. particularly in the euro area, wage growth is likely to be low as a result of moderate economic growth and high unemployment. overall, it would appear that external price impulses via consumer goods to the norwegian economy will remain negative this year and next. there is no indication that growth in imports from low - cost countries is declining. for example, china ’ s share of footwear imports to norway increased by 4 percentage points to 20 per cent in 2004. the share of clothing imports increased by 2 percentage points to 32 per cent. the decline in prices for clothing and foot