Saudi Aramco Sees Demand Growth Stabilizing Oil Market

In his opening remarks, Abdullatif Al-Othman, the governor and chairman of the Saudi Arabia General Investment Authority (Sagia), said this year’s forum came at a crucial juncture for Saudi Arabia, which has announced plans to accelerate economic reforms in order to diversify its economy, and reduce its reliance on oil revenue.

YASREF, located in Yanbu’ Industrial City on the west coast of Saudi Arabia, can deliver up to 100,000 barrels per day of clean, high-octane gasoline through a gasoline complex using an advanced continuous catalytic reformer. Al-Othman recalled that the forum is being held at a time when the Kingdom is celebrating the first anniversary of Custodian of the Two Holy Mosques King Salman’s accession the throne.

According to the Wall Street Journal, al-Falih’s defiant remarks were one of the reasons oil prices dropped again on Monday morning. Crude oil prices are down 70 percent from mid-2014 and off about 10 percent since the start of 2016, even with a rally of 9 percent last week.

Saudi Aramco Chairman Khalid Al-Falih said on Monday that plans for a possible initial public offering are not being driven by a need for cash amid a global slump in oil prices, but instead signal a desire for greater openness to outside investors. It has formulated a new strategy in response to cheaper crude, Al-Falih said at a conference in Riyadh.

It said the economy of the whole Middle East, North Africa, Afghanistan and Pakistan, which includes oil importers and exporters, is forecast to post higher growth this year and the next but at a slower rate due to conflicts and low oil exports.

Saudi Arabia, the world´s main producer of oil could sustain low prices for “a long, long time”, al-Fatih told a conference in Riyadh, Bloomberg reported.

OPEC, led by Saudi Arabia, usually intervenes to correct any discrepancies in oil prices. Last year Saudi Arabia saw a $98 billion deficit because of low oil prices. Furthermore, the Kingdom’s income from non-oil revenues has increased 29 percent over the course of 2015.

Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an global audience among opinion makers, business leaders, and respected organizations. With energy and commodity companies sliding, a measure of the correlation between global stocks and oil prices over the past 120 days has climbed to 0.5, the highest since 2013.