*Osama Suleiman from Vienna
The Organization of Petroleum Exporting Countries "OPEC", stated, "The declaration of cooperation between producers, which will enter a new phase in the expanded ministerial meeting of producers in Vienna on December 2, exceeded in its successes the most optimistic expectations." It noted that this declaration focused on restoring sustainable stability of the industry through what can be called "innovative and pioneering cooperation."
According to a recent OPEC report – about the results of the participation of Mohamed Barkindo Secretary-General in meetings of the World Energy Council in the Spanish capital Madrid, the cooperative efforts of the producers helped to accelerate the return of balance to the global oil market in addition to the return of optimism, which is needed by the industry at this stage.
It pointed out that recent data confirms that oil investments are gradually increasing and have had a positive impact in the global economy and in international trade.
The report pointed out - according to Mohammed Barkindo - a significant change in the general perceptions of industry at the level of "OPEC" where the Organization has demonstrated its great potential as a body committed to international cooperation that fulfills its obligations and promotes mutual respect among all States, whether productive or consuming.
The international report stressed that the "Joint Declaration" is now a permanent feature of the global energy landscape, as it established a new framework for producing countries, taking into account the vital interests of consuming countries as well as the world economy.
It added that recent developments in the relationship of producers contributed to the stability of the market. It pointed out that the efforts of cooperation have become vital in all timeframes, as the current focus for many is the short term.
But, we also need to recall that each of the short, medium and long terms is linked to each other, where we cannot see any of them in isolation from others.
In addition, it said that the launch of OPEC's crude oil forecast a few days ago in Algeria aims to strengthen the link between different time frames to enable the Organization to exchange views with all parties in the market and analyze the status and future of oil markets and global energy.
The report pointed to OPEC's conviction that the future holds many challenges and uncertainties for the industry. It also carries many promising opportunities that should be better utilized to promote sustainable growth of the industry.
The report pointed out that the future of energy shifts witnessed a lot of misleading information and data.
It pointed out that some talk about the future depends only on renewable energy sources where electricity dominates the transport sector and fossil fuels go to the records of history - according to this erroneous vision.
It pointed out that this view is very misleading as it is important to address the future of energy in more depth in monitoring and analysis.
It explained that the world will need more energy in the coming decades and that one supplier cannot meet all needs, as all energy resources will be badly needed.
According to OPEC estimates for the oil market, the size of the global economy in 2040 will grow by more than 200 per cent compared to 2017. Over the same time frame, the world population is expected to reach 9.2 billion, an increase of more than 1.6 billion from the current level.
It should also not be forgotten that there are currently about 3 billion people without access to clean fuel, efficient cooking techniques and nearly one billion people who still do not have access to electricity.
The report stressed that access to energy is not a luxury and must be seen as a necessity and there is enormous potential for social and economic development in terms of expanding access to modern energy services.
Global energy demand is expected to rise by 33 per cent between 2015 and 2040, often led by developing countries, which account for about 95 per cent of overall growth.
The report noted that OPEC recognizes the magnitude of the threat posed by climate change to our environment. It stressed that the Organization is still fully involved in this file and supports the Paris Agreement to combat climate change.
It noted that OPEC is fully aware of the dual challenge of meeting the growing demand for energy while constantly improving the environmental impact of all the energies we use. It argues that the biggest challenge is how can we ensure that there is enough supply to meet future demand growth? while achieving this growth in a sustainable manner and balancing the needs of people with regard to their social, economic and environmental well-being.
OPEC estimates that all energy sources will expand over the coming decades, with the exception of coal, which peaks in about 2030, the report said.
It predicted that renewable energy such as solar and wind would continue to significantly expand its role, as it is expected to have the highest growth rate of around 7.4 per cent annually during the period to 2040, although it is important to remember that their current base is low.
The report pointed out that all OPEC countries support the development of renewable energy sources and many of these countries have large sources of solar and wind power. Currently, significant investments are being made in these areas and nuclear power is expected to see some expansions in its share of the global energy mix.
Overall, it is expected that renewable and nuclear energies will increase their share in the energy mix from about 18 per cent in 2015 to around 25 per cent by 2040.
According to the report, all three major current sources of energy (oil, gas and coal) are still expected to provide about three-quarters of the size of the energy mix by 2040.
Oil is expected to reach about 28 per cent with gas at 25 per cent and coal at just over 22 per cent. The role of oil and gas will remain central to the global energy mix for decades to come.
The report said, citing Barkindo, that this vision is not biased because OPEC is concerned with the export of crude oil to the world markets, but a realistic and objective vision. No other international forecast has been released that predicts that non-fossil fuels will approach oil and gas over the coming decades.
The report expected the increase in demand for oil by about 14.5 million barrels per day from now until 2040 to reach about 112 million barrels per day.
Moreover, this is the second year in a row that OPEC has raised the oil demand forecast for 2040.
Transportation is likely to remain the main driver of growing demand until 2040 with expectations of more than 8 million bpd.
It is mostly in the road transport sector, which sees growth of 4.1 million barrels per day.
The report noted that most of the growth is still for conventional cars, however, OPEC believes that the share of electric cars in the long term expand to about 13 percent in 2040, which is supported by low battery costs and policies to support the shift to alternative fuel cars. While hybrid cars are still expected to make up 82 per cent of the fleet by 2040.
The report noted a significant growth in the demand for oil directed towards the petrochemical sector, exceeding the growth in the transport sector during the forecast period until 2040.
It predicted an increase in global demand in this sector by 4.5 million barrels per day by 2040.
The largest increase in developing countries, particularly Asian and OPEC countries, is expected to be driven by demand for petrochemical products and an increase in the availability of raw materials in these areas.
Oil prices rose more than 1 percent at the end of last week. Brent contracts were the highest level in four years as Iranian crude exports were under pressure from the US sanctions expected to Tehran, which is raising concerns about supply shortages, although two other major exporters are increasing their output.
According to Reuters, the world's benchmark crude prices rose to reach $ 82.72 a barrel after recording earlier in the session $ 82.87, the highest level since November 10, 2014.
Brent contracts for the third quarter ended on gains of about 4 per cent.
US benchmark WTI futures rose $ 1.13 to settle at $ 73.25 a barrel.
Earlier in the session, US crude hit $ 73.73, the highest level since July 11. Over the course of the month, US crude futures rallied nearly 5 percent but ended the third quarter down about 1 percent.
A new round of US sanctions on Iran, OPEC's third largest oil producer, will take effect on November 4.
The United States is demanding that Iranian oil buyers cut imports to zero to force Tehran to negotiate a new nuclear deal and curb its influence in the Middle East.
China's Sinopec cut halved shipments of crude oil from Iran this month as the state-owned refinery came under strong pressure from Washington, informed sources said.
Analysts said other OPEC countries were increasing their crude output but global stocks were still falling.
Saudi Arabia is expected to pump additional crude into the market over the next two months to offset the fall in Iran's production.
Two sources familiar with OPEC's policy said Saudi Arabia and other producers had discussed a potential output increase of about 500,000 bpd.
However, the bank "ANZ", said in a note that the increase in supplies from major exporters is unlikely to offset the losses that will result from sanctions, estimated at 1.5 million barrels per day.
At its peak this year, recorded in May, Iran's exports stood at 2.71 million bpd, or about 3 per cent of the world's daily oil consumption.
On the other hand, US energy companies cut the number of active oil drilling for the second week in a row as new drilling stagnated in the third quarter and with the lowest quarterly increase in the number of rigs since 2017 due to bottlenecks in the largest oil field in the United States.
Drilling companies cut the number of oil drilling rigs by three in the week ending Sept. 28 to 863, Baker Hughes Energy Services said in its closely watched weekly report.
In the third quarter, the increase in the number of five oil drilling rigs is the smallest since drilling companies cut the number of rigs by three in the fourth quarter of 2017.
The companies added 50 excavators in the first quarter and 61 excavators in the second quarter of 2018, at the same time.
The number of oil drilling platforms increased by one platform in September, the same as in August.
The number of active oil drillings in the United States, a preliminary indicator of future production, is higher than a year ago when it reached 750 diggers, as energy companies increase production with expectations that crude prices in 2018 will be higher than in previous years.
The number of oil rigs has mostly stabilized since June as crude prices fell in spot trade in the western and eastern provinces of Permian due to a lack of pipeline infrastructure to move more fuel out of the region.
Permian, the largest oilfield in the United States, is expected to grow at its slowest pace in two years to 3.5 million bpd in October, slightly below Iran's production.
Overall, US oil production rose to a record of about 11 million bpd in July, according to federal data.
