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Page added on October 26, 2014

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Saudi SABIC’s CEO says oil price decline is temporary

Business

The recent decline in global oil prices will prove temporary even if it lasts a year or so, since population growth will ultimately bring higher consumption and prices, the chief executive of Saudi Basic Industries Corp said on Sunday.

Mohamed al-Mady was speaking to reporters after the company, one of the world’s largest petrochemicals groups and the Gulf’s largest listed company, reported a 4.5 percent drop in third-quarter net income, missing analysts’ forecasts.

It blamed sluggish third-quarter sales, which edged down to 48.71 billion riyals ($12.99 billion) from 48.80 billion riyals a year earlier.

Oil prices had an impact on SABIC’s earnings through the prices of raw materials and final products, Mady said, adding that the impact was not predictable because oil prices were subject to economic and political factors.

He said China was a big, growing market for SABIC but there were changes in consumption there. The company still aims to grow its business in China and is looking for investments there, he said.

SABIC’s Safco 5 fertiliser project and its Kemya synthetic rubber project, a venture with Exxon Mobil Corp, are on track, Mady said. Both projects are in the process of being established.

 

Reuters



3 Comments on "Saudi SABIC’s CEO says oil price decline is temporary"

  1. Plantagenet on Sun, 26th Oct 2014 1:49 pm 

    Population growth will only bring increases in oil demand if population growth is accompanied by economic growth.

    What we are seeing in the EU is year after year of economic slowdown trending to collapse. Even the much ballyhooed GDP growth in the US is very small—averaging about 2% a year, and is only achieved by money printing and huge borrowing by the FED and the Obama administration—and the borrowed money will have to be paid back, reducing prospects for future growth.

  2. Cloud9 on Sun, 26th Oct 2014 3:22 pm 

    We have been in collapse since 1970 when oil production in the U.S. peaked. The fact that extremely high oil prices have been able to reverse that decline temporarily has not altered the trajectory of our decline. What we are seeing now is worldwide demand destruction. The death of the middle class is simply another way of saying the middle class has been priced out of the market.

    The mime that America is the richest and most powerful nation on earth was created in World War II. That image one time had substance. It was created by our huge industrial base and the simple fact that at the end of WW II we were the world’s largest oil exporter. Our past greatness has allowed us to borrow far and wide and run our printing presses like a mad man. Now the story of our wealth and power is getting a little long in the tooth. The money will never be paid back. We are in the process of defaulting on that debt as we speak. We are conjuring our interest payments out of thin air. A key board entry is now all that keeps the great game going.

  3. Makati1 on Sun, 26th Oct 2014 8:07 pm 

    Could9, you have a very clear picture of the situation. It wasn’t a coincidence that the US went totally off the gold standard about the same time US oil peaked. They knew then that the jig was up and collapse was inevitable. They have managed to delay it for about 45 years. Will we see the 50th anniversary of that struggle without it all collapsing? I doubt it.

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