Oil prices plummeted!

Recently, WTI international oil prices have continued to fall, from a price of US$76.
25 a barrel to US$68.
28 a barrel, with a maximum decline of 7%
.
The oil market is in a downturn, but Aramco's second-quarter net profit jumped an astonishing 288% to 165.
2 billion yuan, while maintaining its 121.
8 billion yuan dividend
.

Aramco's net profit for the quarter was $25.
5 billion, compared with $6.
6 billion in the same period in 2020
.
The results beat expectations, with analysts expecting a median net profit of $24.
7 billion for the quarter
.

Aramco said net profit in the first half of the year was $47.
2 billion, compared with $23.
2 billion in the first half of 2020, a 103 percent increase
.
The company said the results were supported by the global easing of Covid-19 restrictions, vaccination campaigns, stimulus measures and accelerated activity in key markets
.

dividend plan

Aramco said free cash flow was $22.
6 billion in the second quarter and $40.
9 billion in the first half of 2021, compared with $6.
1 billion and $21.
1 billion in the same period in 2020
.

That's important because free cash flow now exceeds the $18.
75 billion quarterly dividend for the first time since the pandemic began
.
Aramco already pays the world's largest dividend, but the improving outlook has prompted some analysts to call for a higher payout
.

"Dividend increases are needed to remain competitive," Bank of America analysts said in a research note ahead of the earnings release
.
"Rising oil prices and OPEC+-driven production increases should support a significant increase in free cash flow over the next few years," he added
.

Aramco responded by saying that its dividend for the quarter remained at "normal levels" but would make "recommendations later on whether it will stick to its current payout schedule
.
"

Aramco, majority-owned by the Saudi government, is the country's main source of revenue
.
"All of this will be reviewed with our board and we will decide at a later date if there are any additional dividend distributions," Nasser said
.

Price Outlook

Oil prices have surged about 40% in 2021 to around $70 a barrel, prompting oil majors BP, Chevron and Royal Dutch Shell to raise dividends and launch share buyback programs
.

"Our expectation is that the recovery will continue," Nasser said
.
"We're seeing more economies open up, and we expect demand to be around 99 million barrels by the end of the year .
.
.
while the total demand forecast for next year is 100 million barrels," he added
.

Aramco also said it had lowered its gearing ratio, primarily the ratio of corporate debt financing to shareholder equity financing, to 19.
4 percent as of June 30, from 23 percent on December 31, 2020
.
The decrease was primarily due to higher cash and cash equivalents and stronger operating cash flow, as well as gains related to Saudi Aramco's recent crude oil pipeline transactions
.
Capital expenditures were $7.
5 billion in the second quarter and $15.
7 billion in the first half of 2021, up 20% and 15%, respectively
.
Aramco said capital spending in 2021 is expected to be around $35 billion
.