Saudi Aramco shares dropped for a fourth day, edging closer to the price they were listed at in December as the coronavirus reduces demand for oil.
The giant oil producer lost as much as 1.8% and was among the main contributors to the decline of the Tadawul All Shares Index in Riyadh.
“Aramco has direct implications with Chinese oil demand, both in price and volume terms,” said Vrajesh Bhandari, the senior portfolio manager at Al Mal Capital in Dubai.
The shares have still performed well relative to crude prices, he said. While Brent has slumped 17% this year, Aramco is down 6.2%.
Oil declined for the fifth straight week last week, with Russia yet to back Saudi Arabian calls for OPEC+ to cut production. Investors also reacted negatively to the U.S. Federal Reserve saying the virus posed a threat to global markets.
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Saudi Arabia’s non-oil growth rate in the third quarter was the highest in five years and momentum continued in the fourth quarter, said Bloomberg Economic’s Ziad Daoud. Still, he said, “two headwinds could derail this recovery: public spending cuts, and a reduction to oil output in response to the spread of the coronavirus.”
