we are joined by javier blas. to what extent is the rebound in oil playing into the hands of the league of shale producers in the u.s.? a rebalancing of the market means a contraction in shale production in the united states. javier: it is down more than 600,000 gallons a day since last year. , youow, with oil prices are trying to lock in prices for 2017, some of the shares of the business may be able to deploy new brakes. now, we are getting to the point , getting from $30 to $50, that was the easy one. $50 to $60, we will see. every time the price goes up, shale production comes back and then the saudi's take the pain were actually, no. it is like the delay in production comes back and prices could rise to $100. mark: there is a belief by many that the market will rebalance in the second half of the year. let's talk about the supply part of the equation. canada, nigeria -- what is the situation? javier: we have lost about 50 million barrels a day in may. those outages took the market by surprise. in canada, ther

javier blas joins us from london.is going to be in terms of long-term fundamentals. the news over the weekend, game changer? >> i think it's more of the same for saudi arabia. al-falih is the new energy minister. he sounds more bearish than the last one. potentially over the short term as the markets start to assimilate to a new voice the headlines may sound more bearish in the past but i do not think it is a significant change in the oil policy. matt: looking at contracts going forward. the third month out ahead of the second month out, it is trading for more although that spread has come down. what do you think about futures pricing in oil contracts? >> i think that is a clear indication of a market that is beginning to tighten. it is very closely watched by the market peaking around $12 in february. things have come down to less than three dollars today. to tightening is about happen. at some point in the next couple of months maybe the markets will reach supply and demand. we will have to go through a lot of inven

want to turn to javier blas he basically said, don't get your hopes up too quickly.e not buying a set potential increase in prices. is that what your report is showing? there is similar. we are seeing a significant amount of hedging on the future. selling oil for 2017. that is keeping the back and more depressed. prices in the future remain more contained. how long that will last? that is the big question at the moment. the market has been driven by supply disruptions. if those's supply disruptions last longer we could see prices move up higher. we have seen it in nigeria and canada. is that having a substantial effect on the market now? having a very big effect on the market. take nigeria. it is at the lowest level for nearly 30 years. militants in the delta are blowing up key pipelines owned by companies including chevron. that is something we have not seen in at least six years. securitying consultants and analysts worried. a point that is difficult to repair. canada is probably a short-term story. they are putting pressure on production but altogether around the

thanks neil atkinson and javier blas. blain is going to stay with us.xt, a big night in the u.s. election season. ted cruz, walking away. we discussed this story, next. ♪ guy: 14 minutes into the equity market session. it was a down day yesterday. we have seen some stabilization this morning. 6167 is where the index is trading. the dax is positive and the cac is positive, and that is because of what is happening with socgen . is trading strongly onthe upside, up nearly 4% this morning. as i pointed out earlier, it has dropped over the last couple days. yesterday's session was a big down day for european stocks. let's show you what is happening with socgen. this will show us if we are still in positive territory. unis still absolutely flat der the two day basis. they have recovered from the losses yesterday, but nevertheless, we have slightly elongated periods. we are not seeing good news being reflected in the numbers. let's get you caught up with the bloomberg first world ms.. -- bloomberg first world news. funds have come under attack by billionaire s

having a blast joins us now -- javier blas joins us. fe gets easier if oil is at $50 instead of $20. javier: i think life is getting easier for all oil companies, particularly small oil companies, and also for the banks who are financing these companies. let's not just call mission accomplished for the oil sector. at $50 oil the level we were back in mid-november, and that is when ceos of exxon mobil and bp were saying, we are going to do a lot of cost-cutting because at $50 we really need to do things. it provides breathing space that we are not out of the what's. -- out of the woods. $50 is the sweet spot and they are expecting it to rebalance in the third or fourth quarter. are you surprised we are rebalancing quicker? javier: we have had massive disruptions in nigeria where production is the lowest in 20 years. delta, andthe niger the same thing with the wildfire in canada. they are more or less under control but that has disrupted oil flows, and they have a very close proximity to consuming centers. in two days they are in the unite

we want to welcome have javier blas-- hav now. scarlet: what do we know about the new oil minister?re recently, he has been a chairman of a company. he is very close to the new king. he is also very influential to the deputy crown prince. .e is an insider, a technocrat some worry that he will carry on the current policy, fighting for market shares. alix: that is kind of the rhetoric i was getting from the research notes. was this transition of power -- what this transition of power means is that saudi arabia will use oil as a geopolitical weapon instead of a supply and demand balancing factor. what do you think about that? mark b.: certainly the -- have javier: certainly, when asked oil,udi arabia could use the old minister said, if you have questions on iran, go to the minister of foreign affairs. he was a technocrat. he ran the industry almost like a corporation. prince, princen mohammed, has been willing to use a mix of foreign policy and oil policy. whether saudi arabia will use it as a weapon, i think certainly we will see saudi arabia using more politics, or mixing more politi

javier blas, talk to me about driving things toward and barrel. alter javier: we are losing some had thousand barrels a day in nigeria. -- 700,000 barrels a day in nigeria. in the background is the demand that a strong. everyone is driving a lot in the u.s. that combined with supply outages is bringing us to $50 a barrel. jon: i want to talk about debt supply. a $9 billion auction -- what does that tell you about market conditions? javier: the pain for the producers has been really acute. you see qatar borrowing $9 billion. they have a big production, relatively reduced population. it is not a country you would expect to be in trouble. that at $50,ing us the problem is not over. although the markets have rallied, we are up about 80% from the lows, we are only back to the level we were in november. back in november, we were talking about trouble for producing countries in the middle east. yes, the situation is better, but will qatar is telling us is it is not mission a come pushed. $50 crude, there is an obsession with round numbers. reporting $50 i

joining us to explain is javier blas.lts very similar to the other stories we have seen. downstream outperforms, upstream looks ugly. what do we need to know? >> this was the first quarterly ll's bigafter she increase in gas production. the downstream sector does very well. chemicals also performing strongly and the upstream continues to underperform. this was a very good quarter for shell. it is still the worst quarter since the end of 2008. morning: remember the the deal got done. the pushback against this deal was just immense. why now? why so much money? is it starting to pay off a little bit? >> clearly there are still struggling to digest the deal. the capital expenditures forecasting for this year -- grievously guiding toward $33 billion. the cfo told us it could go even lower. it is a bit early to say that this is going to work. it will all be depending on a factor of oil and gas prices in particular. of gas about the future production. david: they were deciding to keep their dividend but give up their capital inv