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Norway's government has been told its state-run fund should drop its investments in oil and gas stocks.

Norges Bank manages Norway's $1 trillion (£758bn) sovereign wealth fund on behalf of the government.

It would make the country "less vulnerable to a permanent drop in oil and gas prices", and its advice was not based on a price forecast or the sector's sustainability.

Around 6% of the fund is invested in oil and gas stocks.

"This advice is based exclusively on financial arguments and analyses of the government's total oil and gas exposure," said the bank's deputy governor Egil Matsen.

Norges Bank's proposal must now be reviewed by Norway's Finance Ministry, which has said it will announce its own view in the autumn of next year.

If it decides to back the central bank's proposal, the country's parliament would be able to vote on it in June 2019 at the earliest.

Norway is western Europe's biggest oil and gas producer and its sovereign wealth fund, known officially as the Government Pension Fund, is used to invest the proceeds of the country's oil industry.

But Norges Bank said that investing money back into the energy sector meant the government's exposure to the price of crude was too high, particularly given the country's majority stakes in Statoil ASA.

"There is a substantial difference... in return between the oil and gas sector and the broad stock market in periods when the oil price changes substantially.

"Oil price exposure of the government's wealth position can be reduced by not having the fund invested in oil and gas stocks," Mr Matsen said.

Nonetheless, shares in major oil firms such as Shell, BP and Exxon Mobil all traded lower after the announcement.

And analysts warned that the central bank's proposal could have a knock-on effect on the sector.

"The risk for the oil sector is how many investment funds will downsize their exposure to extractive industries," said Jason Kenney, oil analyst at bank Santander.

But Quilter Cheviot analyst Liz Dhillon said the move was "no real cause for concern".

"Nothing is imminent and even if the advice is fully implemented we believe this will have limited impact on the oil and gas producers, as the holdings of Norges Bank are relatively small and no doubt will be disposed of over an extended time frame," she added.