it should be a bigger discount if you see permian oil stuck in texas.an: are you saying we should go back to parity at some point? that big widening was a fact of eia expecting us to get closer to 10 million barrels, 11 million barrels here in the united states, which is not going to happen. clearly those projections will not happen. in addition to this, the opec deal has yielded another one million barrels a day, which will flow almost entirely to the benchmark brent price. that's what you see brent start to go down, and the wti price start to rise based on the increases of production not going to happen. so that temporary outage from canada only adds more fuel to the fire. it might be temporary, but these other things will become systemic. alix: in iran, it could be systemic, but we do not know the impact of that. the big news this week for that was the u.s. was going to stop altogether buying iranian crude. if you look at the big buyers, it is france, italy, china, india. what is your expectation for that? dan: again, this is another piece of the puz

shale supply is constrained because the bottleneck in the permian.pite that, it is growing quickly, at the fastest rate ever in terms of barrels. remember, eventually all of these barrels a make it to the market and we won't need as much opec oil into 20nd020. alix: time for your takeaway, gradual 1.2 million barrels may increase over the next several quarters, the big one, maybe announcing a cap x planted -- capex plan. coming up, cheese. copper got hit along with industrial metals on weaker chinese economic data. ♪ ♪ +alix: i'm alix steel, this is "commodities edge." time to delve deep into the market trends. first up, oil inventory numbers, a big drop in crude stocks, 4.1 million barrels. imports down, exports up, and u.s. gasoline demand at a record. in the crop market, it is getting hot in here. big problems for wheat in the u.s. it could be down more than 5%. the agency updated numbers this week, kansas down 19%. many questions as to whether the number is too conservative. corn also had a wild ride this week. here's the bearish case. u.s. crop

shale supply is constrained because of the bottleneck in the permian.espite that, it is growing quickly, at the fastest rate ever in terms of barrels. remember, eventually all of these barrels a make it to the market and we won't need as much opec oil into 2019 and 2020. alix: time for your takeaway, gradual 1.2 million barrels may increase over the next several quarters, the big one, maybe announcing a capex plan. francisco bland be sticking with me. coming up, cheese. copper got hit along with industrial metals on weaker chinese economic data. ♪ ♪ alix: i'm alix steel, this is "commodities edge." time to delve deep into the market trends. first up, oil inventory numbers, a big drop in crude stocks, 4.1 million barrels. imports down, exports up, and u.s. gasoline demand at a record. in the crop market, it is getting hot in here. big problems for wheat in the u.s. it could be down more than 5%. the agency updated numbers this week, kansas down 19%. many questions as to whether the number is too conservative. corn also had a wild ride this week. here's t

shale supply is constrained because of the bottleneck in the permian.pite that, it is growing quickly, at the fastest rate ever in terms of barrels. remember, eventually all of these barrels will make it to the market and we won't need as much opec oil into 2019 and 2020. alix: time for your takeaway, gradual 1.2 million barrels a day increase over the next several quarters, a different way to look at the market and the big one, opec maybe announcing a capex plan. stay with me. president trump has a beef with dairy and cheese prices. and as we had to break, we want to look at the big commodity moves of the week. copper got hit along with industrial metals on weaker chinese economic data. this is bloomberg commodities edge. ♪ ♪ alix: i'm alix steel. this is "commodities edge." time to delve deep into the market trends. first up, oil inventory numbers saw a big draw in crude stocks, 4.1 million barrels. imports down, exports up, and u.s. gasoline demand at a record. in the crop market, it is getting hot in here. u.s. drought is causing big problems for wh

shale supply is constrained because of the bottleneck in the permian. despite that, it is growing quickly, at the fastest rate ever in terms of barrels. remember, eventually all of these barrels will make it to the market and we won't need as much opec oil into 2019 and 2020. alix: time for your takeaway, gradual 1.2 million barrels a day increase over the next several quarters, a different way to look at the market and the big one, opec maybe announcing a capex plan. stay with me. president trump has a beef with daanese rices. and as we to break, we want to look at the big commodity moves of the week. copper got hit along with industrial metals on weaker chinese economic data. this is bloomberg commodities edge. ♪ alix: i'm alix steel. this is "commodities edge." time to delve deep into the market trends. first up, oil inventory numbers saw a big draw in crude stocks, 4.1 million barrels. imports down, exports up, and u.s. gasoline demand at a record. in the crop market, it is getting hot in here. u.s. drought is causing big problems for wheat. the usd

all you hear from the permian is we have the oil. maybe we have the pipelines although we could use more we don't have the people and we don't have the smaller services companies. they don't exist and there's no bank fnlsing to get them going if you're ten guys who want to start your own oil services company, currently you work for a big company and want to go off on your own, you probably can't do it because you can't get the capital or bank loan because the banks are so burned by the last oil downturn so just be careful about saying easily replace barrels lost from iran or whatever here's the question as i have to go back, which is this, we can push our allies to not buy iranian oil, but with all the trade stuff going on with china, are we going to go to china, the biggest buyer of iranian oil, and say, hey, china, don't buy iranian oil. what do you think china is going to say right now there's probably a few things i can't say on camera that will be their response >> it would be in chinese, right, brian >> my chinese cursing game

in the permian, we are getting a dollar 40 to waha.ew power plants that are adding demand for gas on the west side of mexico and now we can get gas there. >> does it matter that the chinese are being tough on us and don't want to accept our oil and gas. >> i don't think that matters. that will create some inefficiencies and maybe that is 50 cents or a dollar a barrel. but china is still going to need oil. >> and how about lowering the cost of drilling. >> we are drilling wells for half of what we spent five years ago. >> half. >> in the eagleford, can drill a well every ten-daysor the lateral section of the well almost 5,000 feet a day. unheard of ten years ago better drilling rigs all of this generation three drilling rigs. and we have better bits and better crews >> regulatory matters, is it better now >> i think it is better. we sold appear la sha. we dealt with that in fort worth when we were drilling in the city but easier to drill out of south texas or west texas. >> fair enough that is chip johnson better balance sheet and low f

>> a lot of permian producers as a whole get hit.ot of pressure pumping names, frac names got hit on this if you go down to texas and the perm ya permian, they try to get crude out by trucks. it looks like the l.i.e. during rush hour. we put out a lot of great pieces from the service side. a lot of these names are overdone a lot of the producers have gotten oversold. a lot of the pipeline doesn't come on until 2018, 2019 >> a lot of names down significantly the last three months roberto, thank you very much >>> let's find out what's coming up on "squawk box. andrew ross sorkin has a couple of ceos, the supreme court, it will be a big show >> in addition to that topic and so much more, energy secretary rick perry will be joining us. right after that, we have the agricultural secretary sonny purdue, we had secretary mnuchin yesterday. we are going around the horn the ceo of snap-on tools will also join us and then debate the big fight over 21st century fox's assets, where comcast may stand or not in terms of coming back now with a bid

we will not see major relief on the permian until late 2019.ssuming you don't have any delays on projects in the meantime. we expect the spread statewide and to get wider. steley there, thank you. we are counting down to the market open in japan, south korea and australia. this is bloomberg. ♪ ♪ 8:00 a.m. here in hong kong. i him yvonne man, welcome to "daybreak asia." toime yvonne man, welcome "daybreak asia." the pboc finally delivers, but cannot lift chinese stocks from a two-year low? the lira surging after president erdogan claiming victory. raising hope of economic private is him. -- privatism. haidi: just turned 10:00 a.m. in sydney. the u.s. and china are caught up in a game of chicken as the eu warns of breakdown in global rules. minister, ourme exclusive interview. yvonne: let's go straight to those live pictures out of -- where president erdogan is speaking to supporters in the city after what look like a decisive victory for him when it came to his party, as well as what we saw in parliament as well. erdogan talking more about coup

alix: how big do you think the shut-ins in the permian basin will be?d yesterday, i think you will see a combination of companies that will delay crack's -- fracks. some companies will allow for firms growing like pioneer, chevron, box seat and some companies will move rig into other basins. others will show very little growth -- until we see 3.5 million barrels a day added to andpipelines in late 2019 2020. alix: do you think we have seen the peak in permian rig count for now? we will see a few, not much, maybe 5% of the rig count at the most. i think most people have long-term contracts and it is better for them financially to delay the fracks. they are about 60% of the cost of the well so i think people will drill and just not frack their wells. alix: i feel like what we are leading up to his drilled, but not -- is drilled, but not completed wells. are we looking at a situation where we have a backlog and all of a sudden in 2019 they will come on stream? how quickly do you anticipate that happening when the capacity is ramped up? scott: i think i agr

and the permian basin stretching across the united states from texas to new mexico is already the biggest shale oil producing region in the country and is set to become the world's third largest oil producing region in the world according to a new forecast from analyst that i.h.s. market i.h.s. analysts say the region's oil production will increase to five point four million barrels per day by two thousand and twenty three the area currently produces three point two million barrels of oil per day more than the nations of mexico and nigeria the researchers say that by twenty twenty three the permian basin will have a greater output then russia and saudi arabia but the scenario envisioned by i.h.s. analysts would require an estimated three hundred eight billion dollars of investment to build forty one thousand new wells in addition to the pipeline infrastructure needed to deliver that production to market the wells would also depend upon highly polluting hydraulic fracking techniques more widely known as fracking. and sticking with energy oil prices went through the air as we went to the ai

is joiningan blackstone to build a $2 billion permian natural gas pipeline. let's take a look at ge, this is a three-day chart. we really want to highlight today's pop a five point 7%, the best day for ge since april 2015 on the news that john flannery is making good on his promise to streamline the iconic american company. they are exiting the health care and oil businesses and will be focusing on power, renewable energy, and jet engines. investors are probably liking this move. up, despite the increase in saudi arabia and oil production. coming up, president trump signed an executive order on family separations at the border, but it has done little to calm the public outrage. from new york, this is bloomberg. ♪ ♪ "bloombergis markets: balance of power." i am lisa abramowicz. david: i am david westin. : president trump is calling today's supreme court decision " a tremendous victory and a moment of profound vindication." justices upheld his ban on travel from mostly muslim countries, rejecting a challenge that it discriminated against muslims and exceeded hi

and nigeria the researchers say that by twenty twenty three the permian basin will have a greater output then russia and saudi arabia but the scenario envisioned by i.h.s. analysts would require an estimated three hundred eight billion dollars of investment to build forty one thousand new wells in addition to the pipeline infrastructure needed to deliver that production to market the wells would also depend upon highly polluting hydraulic fracking techniques more widely known as fracking and sticking with energy oil prices went to went to the air as we went to the air we're sixty six dollars in that sort of trading range while brant crude in london was trading in the mid seventy five's and the us government reported a larger than expected reduction in domestic crude supplies which was the largest single week drop since the end of march however recent data shows an increase in opec production here discuss all of it more as futures and currencies expert simpler trading horder well as you welcome back thank you so much for always preceded when you're here what do you make of the current sit

. : regional differentials in the permian have been blown out.ou have a lot of supply, specifically a natural gas and not a lot of takeaway capacity. you don't have a ton of work going on in the permian, but are you reallocating rigs or cash? ourlance: we learned from igo for the experience, that you have to understand the optimum way to develop over time, and if you in the permian. require if it techniques and different technology and you first have to figure out how to optimize that, and we are in that mode of trying to optimize, but before you get into the mode of full-scale manufacturing, have to make sure you have that. we did not see it coming this quickly because the rigs have risen pretty quickly and productivity has come online pretty quickly, much higher than people were expecting. we are in that kind of mode today. transportation coming, but not for a couple of years. we're looking at how we reallocate capital. why would i drill internet headwind when i could reallocate capital somewhere else? we're looking at it very closely right now

, if it's not locked in by permian, i like it, particularly if it's a large independent, but if it's permian, i think the pressure and the stories about too much oil in a small place are makit so you can't own it >> interesting okay doc, go ahead. number two >> fang, this one is diamondback, fang, dmondbang >> this is what i'm talking about. this is locked in. this is a cul-de-sac of oil. >> the-de-sac is down $4 today. and they came scrambling in to this one on that drop. to buy upside calls. so they're buying the uni120s. >> geez. >> on a $4 sell-op, i would rather buy those than buying the stock and catching the falling knife. >> thank you for saying that people at home have to recognize, you may listen to me and say fang is going down if you want to take a position in fang and bet against it, please do it this way. that's the conservative way. >> you think fang is going down? >> i just think -- look, i am looking -- >> a better place than both of you guys >> diana darko, i know stephanie likes her, anna darko doesn't have that kind of exposure, and it's held up well in this perio

>> there is a big spread between the permian and the rest of the country.alero is a good stock let's go to mike in maryland >> caller: what's up, jim, let's go birds. >> yes >> caller: my stock is ichr. ichor. >> dennis in michigan. >> caller: i am at a loss. diamondback energy is down. >> this is all about the glut of oil. can't get, there is a traffic jam at the permian and making it so that f.a.n.g and a couple of others are being hurt. i would stick with it. rick in illinois. >> caller: this is windy city, rick, thank you for taking my car. i am a first time caller i bought monster beverage back in 2015 thinking it would be possible buyout candidate. it has split to three to one and recently missed quarterly earnings is monster beverage a buy, sell, hold. >> they missed the quarter and i don't see any turn around quickly. it is not worth being in tom in new jersey. >> caller: thanks so much for taking my call i am a giants fan, you are an eagles fan i want you to be nice any. emerson electric. >> telling all club members that we think that emerson can t

top to bottom across the globe, this is a pure play in the permian basin.arly and costs are low. they have a neat balance sheet and they've got the right assets and the right place right now. liz: 29 bucks, annual low was about 21. they are moving off that. it's fascinating to watch. you 15 second, what happens, does this boon in all the energy continues throughout next week? >> yeah, i'm sure -- well, i'm pretty sure that's what's going to happen but let's not count out exxon mobile, they are offering 4% yield right now, they've had missteps in the past, we probably see 30% total return in exxon mobile. liz: the dow, yes, it snapped 8-day losing streak. that will do for claman countdown have a great weekend. melissa: dow rising today, ending 119 points. losing steam ending off sessions high. s&p 500 joining the rally but the weakness in technology is causing nasdaq to slip for the second day, i'm melissa francis. david: i'm david, glad you could join us. here is what else we are covering for you in a very busy hour. vowing their lowseses won't be in vein,

the production, the permian's grown faster than the infrastructure can catch up. be a little constraint in permian oil getting out for the next 12 or 15 months. it'll still grow, but not as fast as it naturally would grow. >> around $66 a barrel right now. what are your expectations for this meeting are they going to say, okay, you can produce a little bit more, push the price down or vice versa. what do you think is going to happen there >> i don't know. you know, i think the worry is that if they don't increase production, the oil market might get too tight and oil prices might go up a lot. i think saudi arabia or a long-term will worry about that. >> are we that tight now if it takes a couple months to get the supply on line, do we need more? >> when the market was super loose or 17 when it's crazy tight. the interesting thing, kelly, is most of the opec producers aren't even producing at their agreed limit because they kbt. -- can't you have these weird dynamics where uae could produce a little bit. venezuela and nigeria and libya are way below their quotas. >

this is what's happening in the permian, huge ramp up in production.that has been killing the spreads and it does not look like it will get better. those pipelines into west texas are not coming along so fast. for the same reasons the canadians had to get involved. it is unsure whether pipeline builders are going to get a good return back for the amount of money they are spending to put pipelines in. david: as you are making investments have you take into account things like the price of oil? the difficulty with the pipelines? burns: from an investor's perspective we are looking at oil stocks. the equities. one of the key factors to focus , as oil prices have run up over the past year the stocks have been largely left behind. last year they lagged by a wide margin. you have a lot of players that can be profitable. a lot more disciplined. they have cut costs. they can be profitable at prices far below what they are today. one of the themes that has continued to work well this year has been a group of names referred to in the press as the pleasures. comp

differentials blowing out and issues with permian infrastructure.ink we -- the companies that have the large capital to build that infrastructure and execute on their development plans, we think they are well-positioned and most likely the beneficiaries of higher crude prices. julia: i wanted to pick up on what you said about some of the infrastructure bottlenecks we have in the u.s.. that evenve that in with a net increase of 600,000 barrels a day here, we will see the oil market tightening as we had in the 2019. perhaps throw in some further issues in libya and nigeria and tightening in iran and venezuela potentially. what are we term -- what are we looking at in terms of either prospect of oil price by 2019, and what level are we talking about their? -- about there? oil isonsensus would say range bound. if we break out of that range, it will be to the upside. a lot of that is driven by on for seen bottlenecks or hiccups in supply growth. permian, you know, has been growing quite rapidly, and i think that growth will continue. because of infrastru

the permian basin ottleneck a year from now will probably be solved by infrastructure spending i like this call what i'm really pointing out is the five names that were up there, you can buy them for different reasons. the one i particularly like is royal dutch shell because of the dividend with the dividend of about 5.2% on royal dutch, i don't have to worry about what happens to oil over the next month. i know i'm getting the dividend back i know there's economic growth over the next few years that will propel oil higher all of these names will go up. but i think dutch shell will do it better. >> if i told you you're going to get economic growth, a higher dividend, that's what the analyst is banking on, and you get more >> so i'm purposely picking royal dutch shell because lower volatility conocophillips will be higher volatility for the reasons you listed, and that volatility, scott, should be to the upside, but i'm willing to get volatility elsewhere in my portfolio and have royal dutch shell be a steady eddy with a growing dividend player in my portfolio. >> after lagging for suc

feast and famine, in the permian shale basin, the oil boom is driving sales tax andnue to record highsemployment is still at a record 2.1% low. news's david joins us from houston to weigh in on the oil industry's workers.for david, your story is really fascinating because you look town midland, texas, in particular and how places like restaurants are finding it difficult to get workers. what are some of the stories you heard when you were there? >> yeah, it's such a vexing situation because in one sense everyone is proud in this town to see their town world for the this hot commodity of oil and so you know, you see on theelectronic sign flashing weekly rig count and how half of all u.s. rigs are right here in the basin, but in another sense it's very frustrating to locals because you end up losing the service workers from hotels and restaurants and else that you can think of because they're allured by the higher wages a goodand so it's thing, but it's also a bad thing. kids are late for school a cdle if you have and you can drive a school bus you can also now asentially make as much $1

even though we have increased shell output out of out of texas the permian basin is absolutely just pumping oil left and right we have no way to actually get it to market as effectively as officially as we need to to become that net exporter that we probably will become even in line or ahead of russia within the next twelve to say eighteen months so really we have an infrastructure problem here and the world knows it so we're actually seeing more abandoned wells drilled but not going to be utilized and this is actually been a boon for refiners i think there's an interesting story there as well i want to talk with you about better sub point we also saw the u.s. energy information report yesterday that supplies have actually fallen by nearly ten million barrels and how does that play into all of this i mean i suppose it's just a zero sum game right it is and it's interesting when you see the crude oil draw down and you see the build up expected build up in gas the reserve blends stuck when you see that way the way the seasonal rally the drunk driving season rally has continued to be something

a lot of oil support in the u.s., so much that pipelines in the permian basin are pull up. -- full up shortages elsewhere in the world. i'm agent venezuela -- i mentioned venezuela, iran. we may see a significant decrease in production in iran. there has been a huge volatility in spread between these global benchmarks. we will see that continue. caroline: what will we see continued in terms of opec expanding? is long-lasting effect russia at the negotiating table and whether opec will expand its country? russia, arabia and seems to be the most important thing, russia is the saudi's to go with a big reduction increase and the saudi's came through. a personal dynamic between the two ministers. two of the biggest oil exporters in the world. they have the ability to dominate going forward if russia wants to be invested long-term in the group. caroline: donald trump tweeted about oil and the reaction to the so-called deal, he wants significant supply increases. how much do you think you waited to the decision being made this week? >> the first time he mentioned opec, april, flipped the sto

andhe spread will stay wide permian crude oil will continue to trade at a significant discount.reflects bottlenecks going on in that part of the country. we talk about shale is being fast cycle. the infrastructure is not fast cycle. it takes a long time to build type -- pipelines. i think that will impede the arel of shale because they answerable to shareholders. where those oil prices are trading at a significant discount, that is going to impede their ability to grow. we imagine that those discounts will remain in place and when it comes to trade, if china imposes tariffs on u.s. crude oil, it will find other markets. it might have to take on itself little more of a discount. >> it's not a question of how much. thank you for joining us. previewing what is likely to be a contentious opec meeting. catch up on the key analysis that you want to save those charts for your future reference as well. ♪ this is bloomberg. take a look at that croatia and france through australia and argentina just hanging on. peru is out. russia 2018. bloomberg subscribers can check out the latest resul

john: right, the pipelines don't get built in the permian until late 2019. to get built. the question from there is once you get the oil out of midland, how do you get it out of the gulf coast? the midland is price going to increase to the wti price or is the wti price going to fall?\ we think there are real constraints and there are opportunities for midstream companies. alix: you were mentioning for the supply gap and i want to show another terminal. cc rv shows the forward curve for oil, six months ago, it was that green line, the big change is the re-rating in prices all the way through to 2022. the forward curve is re-rating. signal forig buy integrated companies? john: we think the move will give confidence to the majors and two oil companies to invest in some of the long-term projects that really are needed to balance the market over the long-term. that is very significant and we think that is very helpful. david: that is my question. i understand that makes perfect sense in the services. shareholders don't love it when they start investigating -- inv

and we do have a lot of problems with oil and there is no way to get the oil out of the permian i am not a fan of dnr. oil is going to hit 62, 63 and then we will reassess. verizon ceo is announced he is stepping town. i am talking to tim armstrong for what is ahead. >> and chip and joanna from fixer upper, probably is not going to renovate your house soon don't miss our exclusive with house. stick with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter have a question? tweet cramer, #madtweets send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc miss something head to madmoney.cnbc.com. >> announcer: lightning round is welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com ♪ save up to 15% how do you know you made thearly right call... ...you just do. the light beer you've been waiting for has arrived. lower carbs. lower calories. higher expectations. corona premier. ♪ with expedia you could book a flight, hotel

economy over 10, 20 years, these infrastructure assets in the permian basin will grow much faster thanominal gdp. the pipeline sector is a long-term very positive sector for us. vonnie: we have spoken about the curve and brought up the flat u.s. yield curve. not totally flat but 10 more basis points. and about three basis points in change. after the election of donald trump, -- at the election, of dollar trump, that was higher, what do you read off the u.s. yield curve? >> you are right, the yield curve is extremely flat. one year forward, swaps, to tens is perfectly flat. highly unusual. 30 year data, it rarely inverts. what is that -- what that is pricing in is a strong u.s. economy where the market has confidence the fed can continue to raise short rates but ultimately longer-term fears that eventually the tax stimulus will fade. coyotewill hit a wild you could get020 a sharp slowdown in growth. hopefully the fed will have to reverse course and eventually ease that. of the that is because fact that bonds are set in a global market and with yields so low in germany and other markets

space, they are committed to that >> that goes into your thesis that we can't get more oil out of the permianand will grow got iran coming offline. libya down 400,000 barrels even with the opec raise you think the market will get tighter? >> i think the opec raise is a yawn >> don't say it's a yawn i flew to europe for that. >> it's not a yawn then. >> it was a -- yeah. it's a half step this doesn't even solve that problem. the market is getting tighter. >> can you find workers? >> it's hard we have a great team and a lot of great folks, but we need more >> you have to pay a truck driver 150,000 a year. i'm not kidding. >> not quite that, but we've gotten there in the past in north dakota and we could get there again. >> all right dan, appreciate you getting up so early come see us again. >>> time for the top trending stories. landon dowdy is back >> here's what's hot and trending more than 75,000 people were stranded overnight after bali's international airport was forced to close due to a volcanic eruption the volcano began erupting yesterday spewing ash high into the air and endangering pl

if you are in the middle of construction of constructing a pipeline in the permian, which is going onand you have got a repricing of deals, and you have the steel to complete the pride line coming from -- the pipeline coming from abroad and have a capital structure in place, your derailed. you do? you scramble to save, you don't make the next deal, you wait until it settles, and that is when the slowdown starts. effect just the tariff on price. when you can't bring in this deal or you have to have a different investment restriction, you double down. this is a multiplier effect. i don't think we have even seen the initial shocks you. -- yes. t. haidi: i want to throw up a chart that shows the mass exodus from asia. seeing the familiar refrain when it comes to the bond and fx markets. why are we seeing this bearishness when it comes to emerging markets, given so many have strong fundamental, to mystically driven dogma stories that -- domestically driven dartmouth stories? is this a strong dollar story? david: one is, especially if there has been borrowing by a country denominated in dol

they have to read more barrels then you have the permian reaching capacity. the u.s. will not grow as much over the next 12 months. they have to add some more supply to the market >> dom, sheffield things the deal will get done maybe 300,000, 600,000 barrels a day because of that production coming offline down the road >> when should we expect a decision from opec and when does that response from russia come in >> yes okay call it ropec. russia plus opec russia and saudi arabia have come together. you have these unlikely alliances formed ironically, even though the seminar starts today, the meeting is on friday, all the -- you'll forgive me -- palace intrigue began last week at the world cup. mohammad bin salman the ruler of saudi arabia and vladimir putin sitting together watching the opening game of saudi arabia and russia alexander novak was also there along with the head of saudi arabia's oil ministry. they were there. the negotiations began really last week. their whole goal is to get everybody in this building on board. iraq, iran, and venezuela are opposed to a

now they're building out the permian, the area mostly in west texas, a bit in new mexico that is a lot of crude that will hit the markets. they just can't get it out right now. >> this is just about pipeline capacity in some ways. >> absolutely. 3 million barrels per day of pipeline capacity is being built right now and will be coming to a market near you in the next couple of years. >> beth, stay with us. we'll take a quick break that was beth evans. coming up on the show, we'll go out to vienna. if you have views on opec, get in touch on twitte twitter, @streetsignscnbc. steve sedgwick is standing by to interrogate opec ministers after the latest ministers we'll bring you inside that meeting once the doors have been opened no matter how much you clean, does your house still smell stuffy? that's because your home is filled with soft surfaces that trap odors and release them back into the room. so, try febreze fabric refresher. febreze finds odors trapped in fabrics and cleans them away as it dries. use febreze every time you tidy up to keep your whole house smelling fresh air clean. f

tied to energy in permian basin.nd truckers to get the oil and energy out of there. also with lng, liquid nitrogen gas, they need that as well. liz: we're at session highs right now. we're up 93 points. you're giving bulls good luck in the last couple section. what is one area you would avoid? >> great question, going back to my comment and mid-caps, go to multinationals look at with all the issues going on with g7, tariffs, geopolitical, that will be an issue that could impact mult at the nationals along currency issues. liz: good to see you, greg. greg fowl, five plan partners. [closing bell rings] we'll put them on the facebook page. melissa: turn around on wall street. stocks reversing earlier losses. the dow ending up 71 points to session highs, adding to its gains for the week, best in three months. s&p 500, nasdaq also ending the week in the green. i'm melissa francis. david: happy friday, to everybody, i'm david asman. glad you could join us this is "after the bell." more on big market movers. here is what el

down to georgetown, texas where the power is going top we've been driving all afternoon through the permiann the center of texas, and all along the way we've been passing oil pump jacks from an older economy and wind turbines from a new economy. when we arrived in georgetown, people told us coal plants kept the lights on for we have all this history but also we're one of the leading cities when it comes to innovation in the country. >> reporter: t mayor daleosshenepclubudliedcan market was changing. >> were you always a republican? >> always a republican. >> you grew up in a republican family? >> i did. >> who's your favorite president? >> president reagan. >> reporter: unlike many republicans ross accepts climate science. he supports clean power so much he bought an electric motorcycle. but ross says he approved wind and solar because it's affordable. >> this was first and foremost a business decision. and if you win the business argument then you're going to win the environmental argument. >> have the facts been changing? 10 years ago or 20 years ago wind and solar would have been more ex

of great reporting on is the supply bottleneck in texas and difficulty of getting oil out of the permianher places ,ecause trucks and pipeline it's all full. i'm curious about the .ensitivity if prices go higher or not, is there a limit right now on the variability of what they can produce given the challenge of getting it out of their? david: maybe is happening at a time when -- you know, producers are still drilling. they can still drill in west texas, still drill in north dakota. at some point, natural gas prices in west texas and crude, you're getting to the point where you are running out of takeaway capacity. how do you get it to the shore? we can export crude, it has been great for producers, but they wrapped up so fast there are bottlenecks, and it is starting to hurt them. julia: longer-term oil prices have been important for the future equity play. david: deferred prices, longer-term prices have actually outperformed short-term recently. and that has to give equity that thissome comfort is here to stay for a while, and that has helped the equities sort of catch up with the outr

it could be even more in the permian base in midland texas, pressing $10 behind.the need before tickling capacity. the reason the net is wide is because the marginal barrel has to be put on track, which is much more expensive. , it's a great opportunity for them. essentially they are able to buy crude at a significant discount. you are able to buy at a $20 discount to what the world market is able to buy it at. you pick up an additional $20. in addition, globally, refined product demand to use to be strong. refiners are in a great position right now. guy: so is worth acquiring them, as well? where do you start from? other price for that right now -- are they priced for that right now? brian: they've had a great run. they are of the most. we think this differential between brand and wti midland is likely to take longer. you are probably looking at the back half of 2019 before that is spread barrels again. refiners continued to benefit over the next couple of months. i don't think it's priced into the stocks today. guy: you could argue the saudi's are doing what the

bring more output on, the offset is venezuela and iran then you have the output issues here in the permian basis. >> i 100% agree with you there's this kind of barbell componentry to the way people are playing the market and i think it's the right way to play the market have what works in the portfolio and add some cyclical exposure, whether it be materials, industrials, financials, that can get you some more upside from here. >> josh makes the argument, though, also, that you would be foolish to just forget about europe because of the problems over in italy, and if there's any, you know, i don't know if there's going to be contagion or not. too early to tell the story. >> that's why i stick with those, too italy -- >> technology stocks in asia, you have no idea it makes our technology stocks look like they're asleep >> if you say emerging markets are a good place to be >> i don't >> i know you don't, but - >> everyone will say that when those indices break record highs which may be years from now. my job as an investor, to echo something steve said earlier, his timeframe is shorter than m

fill that void permian?he some but not all.going to have to wait year for that to really make a difference. it's a bit of a complicated global.at's very >> i thought you were ordering oil reserves to be released there. [laughter] >> thank you. is really interesting stuff. great perspective. head of commodities. coming up, the president's border policy breeds confusion the houseers while pushes back a vote on dueling immigration proposals. thel get an update on immigration debate from capitol hill. from new york, this is bloomberg. g. ♪[music] >> "what'd you miss?" the six-month anniversary for the republican tax cuts. remind voters who put more money in their pockets, ahead of midterms. much more divisive issue has been dominating the headlines, immigration. beenresident has not helping. now a push for a solution is back firing for some g.o.p. moderates. to sort it all out is national political reporter, on hill.l so there now seems to be a number of different bills on congress, on both sides of the aisle, that are up for consi

ing is, you talked about infrastructure in the permian basin, we are now exporting 3 million barrels a day, something not only a record, unthinkable a few years ago. we are now exporting more oil than most countries produce. we seem to be peaked out in terms of getting oil to market, as you noted is there any short-term way to increase the oil and infrastructure or is it going to take many years? >> it's -- you are going to take some time. it's going to be, you know, first, second quarter 2019 i would say before the new pipelines get completed. with that said, you can still get that to market it's just more costly. you will be trucking it. and from the permian to the gulf coast is a pretty good piece but i can assure you that in the state of texas, and with the permitting process that we got with the federal government now, it will go faster than it's ever gone in the past to be able to get those pipelines done so this is an extraordinary opportunity. we're seeing a lot of interest in infrastructure in the united states some of it foreign dollars come nook the occupation a great exam

there are simple fundamental reasons for it battle necks in the permian a.ig count that hasn't end kroo up i think oil stays high a lot of the names, services, e and p, integrated oils have lagged slightly the rise in oil. i see the xle and the various sectors continuing to go higher here i like that. i also like financial force the third quarter. we have gone through that. >> josh. >> we don't make changes in our portfolio just because the calendar turns over. >> what do you still like then >> we are strategically invested all over the world we have slight overweight through emerging market n. up, we plan to maintain that the more those stocks fall out of favor i think the bigger the opportunity for longer term invest snoors jj >> i think we will continue to see a lot of volatility. i don't think we will be that much higher by the end of the year with that, i would weeks like this, i think you are going to see a lot more as the year goes on we have constant swirl brexit is coming up. we have to rely on tech and financials we are seeing a third sector coming

oil have to come up so much, shall will be able to do it because they have the bottlenecks in the permian-- supply gap. do you feel like that will happen and when will that be prices?d in longer-term >> i don't>> have a strong view of oil over the next six months. as you look out over time, from my perspective it is a good bet to look at the middle and longer ends of the curve toward for the front months are. i think that will be bullish for equities. i think the equities here are attractively valued versus most forecasts where oil will be over the midterm. >> our ideas getting sidelined in oil prices? -- our ipo's getting sidelined in oil prices? is happening most significantly in the sectors that are performing the best. consumer, andgy, a lot of biotech's. those performances have been more average. >> let's drill into that. we are joined by lizzie fortier who runs our deals coverage in new york. lizzie, a big week coming up for ipos. wife is happening now? -- why is this happening now? >> we are talking about a number of ipos coming in. we have 10 listings for this week in the u.s., th

even into the permian basin, the midland groups, we are seeing a bifurcation of the oil market like theom. the thing that is fascinating to me, at that time, it was illegal ,o export crude from the u.s. so you have the bifurcation because only refineries could get the crude oil out of the u.s. what we are seeing is the capacity around pipelines and ports is not sufficient to bring that u.s. crude onto the market. from brent at 75 down to mid wti, it's aidland $20 spread, quite remarkable. indi: i want to bring jonathan khalil. this gap we are seeing between the crude and brent adding onto the fact that you've got reportedly the u.s. asking opec supply to- bring more the market, we are in unusual times. >> absolutely. you've got extreme tightness globally in markets. opec and russia have done a fantastic job of drawing down access industries and bringing the market into balance. the risk as the trajectory continues, if you get a supply shock from any region in the world, there is not enough , or not enough spare capacity for emerging producers to come back online. , whetherof producers i

if you're talking about infrastructure lag in the permian. >> that is a really long time horizon in thisast new cycle we are in were headlines are changing and ran every cycle. like anall sounds amazing environment for oil to continue to go higher. is there anything else if it will not be the u.s. shale producers that will put the break on it? we couldk there is. release the strategic reserves. that is not out of the question considering we are heading into a midterm election. if you're looking at the demand side of the picture as gasoline goes higher. what is happening right now is we are pricing in tales area. it is not necessarily what will happen, but it does look like that upside tail is larger than we anticipated. when you came on we talked about the like in equities. what the reaction will be then in the equities or if you get it followthrough, now we are talking about supply-side. >> the supply-side shocks will remove and 50 to 60, you saw equities get some momentum. above,ve from 60, 70 and there is demand about the -- concern about the demand side and it is causing hesitation.

we think it is safer to stay in the permian basin stocks were you get the highest quality rocks at thethink that continues to form -- perform pretty well from here. alix: do you play e&p, services companies? like amostly companies concho, somebody that can boost their earnings from here. alix: we are seeing a lot of trongds having s moves. do you look for quick trades, are you looking more longer-term? saira: longer-term. we have been waiting for the supply demand situation to tighten up. now that inventories are more manageable levels, energies should perform well here. you should make sure that you on the highest quality companies. david: we just heard from david rubenstein yesterday saying we are not going to have a recession yet, but we have a chart showing the treasury curve. it has been flattened pretty consistently. is that a warning sign to investors that there may be trouble on the horizon? like that is ag morning sun but we don't see it near term. we think that is quite a longer time away. bull market should be driven higher by earnings growth. we are confident that should co

ryan lance, interesting, it will be an oil permian conversation, as well as a trade conversation.ets, we are softer as the trade continues. s&p futures off by two. dollar-yen off by .2%. the yen still trying to persist, the safe haven of choice. watch tech stocks. they got hammered yesterday. 10-year, 2.87. not the kind of yields that you would expect to see based on the massive equity moves we saw yesterday. david: now it's time for the morning brief. 9:00 this morning, we get u.s. house prices for april. at 10:00, we are watching for supreme court decisions on the travel ban and labor union cases. and at 1:00, the u.s. treasury is selling $34 billion of 2-year notes. alix: company starting to detail the impacts of tariffs on their business. yesterday, harley davidson saying that they would ship their production out of the u.s.. this morning, the president on twitter, they were just using the trade war as an excuse. unbalanced the trade war is, but we will fix it. we are opening up close to markets and expanding our foot. play there or they will pay tariffs. unbalanced the trade

coming up to date later on the pureies edge," player in the permian basin.ot of information about takeaway capacity and how that spread is affecting the business. coming up, justice kennedy stepping down. could meanacement for investment and businesses. we will discuss that with a former supreme court clerk next. this is bloomberg. ♪ g. ♪ what's a gig of data? well, it's a whole day's worth of love songs. 300 minutes of baby videos. or, it's a million chat messages. a gig goes a long way. that's why xfinity mobile lets you pay for data one gig at a time. and with millions of wifi hotspots included, you'll pay less for data. it's a new kind of network designed to save you money. click, call or visit a store today. alix: this is "bloomberg daybreak." a little bit of weakness in europe and strength in the u.s., s&p futures up by two points. we closed below the 100 day moving average. if we see follow-through selling, that is one signal. if we are able to reclaim, that is another signal. italian banks taking the lead on the downside. it wasr asset classes, an in

we've been driving all afternoon through the permian basin. coal plants kept the lights on for generations. >> i think it's really cool. we're one of the leading cities when it comes to innovation. >> reporter: then dale ross knew it was changing. >> were you always a republican? >> always a republican. >> did you grow up in a republican family? >> i did. >> who's your favorite republican president? >> president reagan. >> he loves clean power so much he bought an electric motorcycle, but hoe approved wind and solar because it's affordable. >> if you win the business gum, then you're going to win the environmental argument. >> have the fact witness changing? ten years ago, 20 years ago, it's didn't. >> in the state of texas since january 1 std, four coal plants have closed. this is the economics of the matter. you buy wind and solar for $18 a megawatt. you buy coal for 25. you have a choice. which one are you going buy. >> you think o the art of the deal. >> the art of the deal. might be able to teach mr. trump something. as he has to do is in

. -- permian. bucks willink a few make a difference to them. nothing wrong with a chunk with no volatility, that is helpful. and it is interesting if you come aside the bloomberg, this is the difference between oil prices today versus six months ago. the difference i want to highlight is the re-rating and prices higher from 2019 all the way to 2022. is that an ipo offering curve jump? robert: it would not be bad for them to add that kind of movement in prices and its impact on profitability going forward. but i think it is probably for right now more of a demand function. the fact that oil demand has been continuing to grow. and you know, as you look at the demand curve going out, you still have a fair amount of demand growth coming in and they have been upping the estimates of demand growth going forward. i think that is what has been pushing the longer-term price expectations higher. alix: with the re-rating, if we wind up having a saudi-russia put, where they said they would be making up loss of production, shouldn't that lower the curve? mi