*Osama Suleiman from Vienna
The International Petroleum Economist's report praised Saudi Arabia's focus on developing a green economy.
It pointed out that carbon reduction policies are gaining strength in the Kingdom in view of the urgent need to reduce carbon dioxide emissions and re-prioritization of economic and oil policies in Saudi Arabia.
The report pointed to the increasing awareness of environmental issues and the need to reduce energy consumption in most of the Middle East.
It pointed to the participation of the Gulf countries in the process of gradual re-pricing of energy, improving energy efficiency policies and developing national strategies to reduce carbon emissions in light of the growth of domestic demand for hydrocarbon resources.
The report said Saudi Arabia was implementing a number of successful policies as it sought to try to achieve a comprehensive reduction in emissions of greenhouse gases.
It added that there are efforts in Saudi Arabia to move towards increasing reliance on renewable energy, but the Kingdom is still heavily carbon-intensive, mainly due to the continued production and consumption of hydrocarbons in their economy.
The report pointed out that the growing population growth in the Kingdom, high living standards, intensive urbanization, as well as the government's expansion in hydrocarbon manufacturing have led to a steady increase in energy demand with some estimates suggesting that carbon emissions could double by 2030.
The report said Saudi Arabia was an active participant in international climate negotiations and even before the Paris negotiations the Kingdom has reduced its carbon emissions since early 2010, through a multi-pronged strategy to reduce the energy consumption of local hydrocarbons, implementing energy efficiency projects and investing in renewable energy deployment and reducing methane leaks.
It pointed to the importance of holding Saudi bilateral agreements to reduce carbon, as happened in 2017, when the Department of Energy, Industry and Mineral Resources signed an agreement to monitor carbon emissions with the US Department of Energy.
The report noted Saudi Arabia's belief in the value of diversity in energy industries and the realization that renewable energy development will not adversely affect crude oil production or domestic consumption for hydrocarbons.
Instead, it could lead to the boom of energy industries that could then facilitate the transfer of advanced technology, the growth of the non-oil employment sector and the promotion of life in a knowledge-based economy as well as the strengthening of ties with all parts of the world.
Untill then, oil analysts expected crude oil prices to continue their gains this week after climbing nearly 2 per cent at the end of last week, thanks to optimism in trade talks, which brings together the United States and China that could lead to the suppression of the trade war between the two countries.
Analysts pointed out that the market is receiving strong support from the production cuts that the OPEC + in its implementation earlier this year, which will reduce the global supply by about 1.2 million barrels per day with further supply expected to be cut due to voluntary cuts and political turmoil in many major producer countries.
In this context, Robert Stehrer, Director of the Vienna International Institute for Economic Studies, said to the Economist that OPEC is still dominant in the oil market and plays a major role in restoring balance and absorbing developments through flexible policies and constant adjustments in production levels.
He pointed out that the production cuts that started at the beginning of the new year will have a positive results on the market in a short period, including the first months of the year.
Stehrer predicted continued price gains this week in light of the easing of economic growth concerns and the US-China rapprochement on resolving trade disputes as well as the aggressive cuts by the OPEC + producer alliance.
Moreover, Andre Grosse, Asia Sector Manager at MMIC, said that the surge in US production expected to continue throughout the new year will have an impact in curbing the achievement of high levels of prices, but will not prevent a good improvement in the level of prices to suit the producers and does not harm the economies of consumers.
Grosse said US production grew last year at a very rapid and surprising pace for the market, and it may not be able to continue the same pace of growth especially if prices fall to critical levels that hinder the growth of drilling and investment activities in general.
For his part, Andrew Morris, director of Bureau Link Safety and Management Consultancy, said to the Economist that crude oil prices are closer to continuing to gain price gains in the light of the decline in concern over the levels of demand and cuts affecting both formal and approved by OPEC and its allies last month and losses and forced losses in a number of countries, especially Venezuela and Iran.
Morris added that producers in the OPEC + chose to adjust the oil supply and reduce the gap with demand as an irreplaceable way to restore balance in the market, even if this leads to the loss of some market shares in light of a corresponding surge in US production.
He pointed out that the market is on the verge of resuming price gains in a scenario closer to what happened in the first cooperation of producers in 2016.
Oil prices rose nearly 2 per cent by the end of last week after proposed US-China trade talks eased some concerns about a global economic slowdown, but gains receded after the United States announced a sharp increase in fuel stocks.
According to "Reuters", Brent crude ended the Brent mix to the nearest trading session high of $1.11, or 1.98% to reach $ 57.06 per barrel.
US WTI crude futures closed up 87 cents, or 1.85 per cent, to $ 47.96 per barrel at their highest levels in the session, as crude prices jumped about 4 per cent.
After the last two years ended in a sharp fall, prices recorded significant gains in the first week of 2019, although data finally increased concern about the global economic slowdown.
Brent ended the week with gains of 9.3 per cent, while US crude rose about 5.8 per cent.
US Energy Information Administration data showed a sharp rise in gasoline stocks as refineries raised operating rates to 97.2 percent of production capacity, the highest recorded rate for this time of year.
Gasoline inventories rose 6.9 million barrels last week, while distillate stocks jumped, which includes diesel and heating oil, which stood at 9.5 million barrels, compared to expectations of two increases of less than two million barrels.
There was little change in US crude inventories.
US energy companies cut the number of oil rigs for the first time in three weeks as producers began cutting their drilling plans for 2019 amid a collapse in oil prices at the end of last year.
Baker Hughes Energy Services, in its closely monitored weekly report, said, "The number of oil drilling active in America fell by eight excavators in the week ended January 4, which is bringing the total number to 877."
The number of active oil rigs in America, a preliminary indicator of future production, is still much higher than a year ago when 742 diggers came after energy companies increased spending in 2018 to take advantage of higher prices that year.
But some analysts expect 2019 to see the first decline in the number of excavators in three years after oil drilling companies added 138 diggers in 2018 and 222 diggers in 2017, and the year 2016 witnessed a decline of 11 diggers.
US rock producers curbed drilling for 2019 as crude prices plummeted 40 percent and concerns about oversupply surged.
US oil production hit an all-time high of over 11.5 million bpd in October, according to monthly government data released last week.
In November, US oil production broke its 1970 record level of 10 million barrels a day.
It also has posted a monthly record for the fifth month in a row since June.
