Aramco 2019 profit slides 20.6% on lower crude prices


Biraj Borkhataria, a London-based energy analyst at RBC Capital Markets, said a $10 a barrel change in prices hits Aramco's cash flow from operations (CFFO) by $15 billion, while each 100,000 barrels change in output impacts CFFO by $1.1 billion, assuming a price of $60 per barrel.

But Moscow, the world's second-biggest oil producer, refused - prompting Riyadh to drive through massive price cuts and pledge to boost production.

The US is the largest producer of oil in the world, followed by Saudi Arabia and Russian Federation.

In addition, Trump waived interest "on all student loans held by federal government agencies".

That's "primarily due to lower crude oil prices and production volumes", though declining margins in its refining and chemicals business played a role too, the company said.

"Coronavirus is just getting its claws into Europe and is in the early stages of spreading in the USA, so the week ahead will inevitably bring more disruptions on both sides of the Atlantic", said Matt Weller, global head of market research at GAIN Capital in Bedminster, N.J.

Saudi Arabia has already announced it will make more oil available for customers with an eye on Europe.

Oil prices suffered a massive crash on Monday, dropping by nearly 30 percent following the news about disagreements between Russian Federation and the members of OPEC on the future of its current deal that expires next month. Back in 2017, when oil prices were dropping, the OPEC countries, led by Saudi Arabia and Russian Federation, came together to form a partnership of sorts to stabilise the markets and keep the prices high.

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Why it matters: Aramco is the world's largest oil-producing company.

The market remains highly volatile, with one gauge of price swings in NY crude just shy of its highest on record.

Saudi Arabia fired the first salvo by slashing its official selling price and indicating a major ramp-up in its output - from about 9.7 million barrels a day in recent months to 12.3 million barrels and further to 13 million barrels a day, going forward.

Goldman Sachs said it now expected a record high oil surplus of 6 million barrels per day (bpd) by April, in a global market that usually consumes about 100 million bpd.

CEO Amin Nasser said in the statement: "2019 was an exceptional year for Saudi Aramco". Drone and missile attacks on two of its biggest facilities in September temporarily slashed production by more than half, but didn't cause a big surge in prices. Therefore, when OPEC (primarily Saudi Arabia) held a meeting on the 6th of March proposing the aforesaid cuts in production, Russian Federation refused to comply and promptly backed out of the coalition.

In its latest monthly report, the Organization of Petroleum Exporting Countries lowered its forecast for global average daily demand by 0.92 million barrels to 99.73 million barrels.

He noted that it will damage the entire oil industry, but Hamm said the United States government could place duty on all imports to help ease the situation for American producers.