What’s Really Weighing on Aramco’s Stock

What’s Really Weighing on Aramco’s Stock

Most any given day, Saudi Aramco's stock price is about as useful a yardstick of value as one of Eric Trump's tip tweets.. Something changed the weekend, though: The stock dived following the bust-up between Saudi Arabia and Russia.. When I last valued Aramco just before the IPO, I noted its production of 9.74 million barrels a day - in line with December's OPEC+ agreement - implied about $70 billion of free cash flow in 2020 under my assumptions, including a Brent crude oil price of $65 a barrel.. Under my assumptions(2), if Aramco's crude oil production averages 11.4 million barrels a day in 2020 and Brent averages $40, then free cash flow falls to about $45 billion.. Exact numbers from a model may be about as useful as that quarantined stock price on any given day.. , It was reported on Tuesday that Saudi Arabia seeks to quickly boost sales to north of 12 million barrels a day, implying it means to liquidate some inventory..