, supporting groupings of opec and non-opec. and that compliance levels have improved in may. and will continue throughout this level. >> iran has talked about growing aggressively the demand of oil, possibly putting out 3 million more barrels a day. do you feel the tensions will increase between what iran has been producing now and what it has aspirations for doing so, sir? >> every country hat right for building capacity and expanding its ability to produce, that includes us in saudi arabia, including iran. so we will not limit country's investment. for the nine months, i understand they're on board and they will commit. beyond nine months we will see what investments go into capacity of iran and we'll decemb discuss it with them as a member state. >> thank you very much. so that was the saudi oil minister. i think he was clear nine months they think they can rebalance the market in that period. as you saw, the secretary-general, an old opec hand who has been important in the brokering of the -- just looking there. who is ther

wrinkly, compliance both within opec and non-opec over the five-month period has not been complete. have been supply and demand issues, but nonetheless, talking to your point about hedge funds, market has been caught off guard. we have seen some liquidation. i expect that to continue for the early parts of this week, but then for the market to stabilize and probably rebound. >> you mentioned positioning. it is interesting if you look at the latest eta, some money managers are making bets on $40 per barrel oil in the near future. goldman said they think oil prices wl rebound but the long-term anchor for crude sheens to have shifted lower significantly. do you agree? >> i think i do. i see a generally increasingly consensual view that $100 oil is something of the past, the dollar oil wraps is in the past. perhaps also in the past. nonetheless, i think that toward the end of this year we will get a decent pickup and i expect to see up to $60 in the future. the latest oil breakdown. you can see your line in blue of those continues to build and also your reference line, the wpi in yellow

in december opec and non—opec countries agreed to cut production by 1.8 million barrels per day — aboutl total — to try and push the price up. those cuts were for a six month period which expires soon. they are now expected to extend the cuts for another nine months or possibly longer. look at this graph of brent crude and you will see why. the price surged in december when those production cuts were agreed. but it's been volatile since then and struggling to hold onto those gains. it now stands around $54 a barrel. russia can cope with this level — moscow has based its budget on $40 per barrel. but the biggest opec producer saudi arabia wants $60 per barrel. here's the big problem they have. shale oil production in the us fell sharply when prices hit rock bottom so it just wasn't worth their while. now prices are higher they are back in a big way and their technology is improving. you can see us production has surged by a million barrels a day over the past year, adding to a global oversupply of oil. earlier, saudi minister was confident. translation: all the countries within opec, whi

i don't think opec can do much.n they cut production, they reduce supply in the market. which, theoretically speaking, increases the price which makes it more feasible for show producers to kick in and produce more oil. it is a difficult balance. i think the oil dynamics has really changed while opec is not really changed the way it does things. things are not 100% in the control of opec anymore when it comes to oil. coming up on "the best of bloomberg," we will talk more about the oil story in russia's role in making sure opec's plans to move prices actually work. this is bloomberg. ♪ ♪ yousef: welcome back to "the best of bloomberg markets: middle east." russia has added its voice to saudi arabia's suggestion that oil output curbs will be extended later this month's. there is signaled the prond extensions are needing to tin -- needed to drain the global glut and reduce prices. anthony has more. anthony: i think this will take time to filter into the price because we are very w w compared to how we have been with t

we believe that our cooperation with opec and non-opec countries, we've argued that cooperation come we plan full conformity of the next nine months. trust between apartments is important for us. we value that. we know it takes a lot of time to build that trust. we in our history know that very well. that is why at this point it is important for us that all countries stick to their commitments and that they continue building this level of trust, so not only do we plan to conforming ourselves, but encourage other countries to meet these targets. >> can i ask you, as russia is the biggest non-opec member, have you had to put more pressure on non-opec members to come on board today? >> as far as extensions are concerned, i can say that talks were successful. country saw the efficiency and the benefits and understood the responsibility. what was much more difficult was the talks last year. today, once again, i would say that the physicians are consolidated and there is a lot of solidarity. get more on that opec decision and the disappointment that followed. ben sharples is with us in hon

the iranian minister says opec and non-opec have agreed to a nine-month extension.have heard from various officials -- it's not official official yet. as soon as it is actually official, we will bring it to you on bloomberg television. the market has moved ahead of the expected news. economylk about the showing signs of strain ahead of the snap election in june. sending sterling lower. the brexit slowdown has finally arrived. is it fair to say that now? slowdownis is a induced by the exchange rate, squeezing real income growth, leaving less money to spare for consumers to spend. net exports are a major factor, coming in much worse than forecast. is this a harbinger of things to come now that britain has turn isolationist? -- turned isolationist? jamie: the thing to member is the numbers bounce all over the place. there's a bit of stuff to do, some accounting to do with gold, so don't worry about that. mark: it's not the only thing that bounces around with these gdp figures. jamie: it's quite difficult to see what is moving around inside. we know brexit is going to h

non-opec. it is much more differentiated among its members. in terms of uncertainty i don't think it's the aramco ipo. so far non-opec has delivered half of the cuts they have promised and they really need to step up. it's great to have alex and houston because we still don't know about the price responsiveness of shale. are in theing is we $45 to $55 range. aether we move either way is function of what shale does as opposed to what opec does. david: it's very difficult to get a cartel together. for years opec was really nowhere. what brought it together you go is it shale and is it technology that made shale possible? is also thet november scare. november 2014 when saudi arabia said i am no longer going to accept a reduction in my market share. prices went all the way down to 20 and i think that was a huge wake-up call to opec. that the saudi's will no longer play the role of the swing producers. that is what it took. talking about price sensitivity in houston, texas. there isn't much price se

and their non-opec allies. but for now in vienna it's been quite an extraordinary day where the oil-producing nations have come up with what they call a historic deal. this is steve sedgwick for "nightly business report" in vienna. >>> rob sumhold joins us to discuss what opec's decision will mean for the oil market and where he sees oil prices heading. he's portfolio manager at tortoise capital advisers. rob, good to have you here with us. you heard steve sedgwick's report right now. i think it gels with what you're expecting, which is oil prices that steady out between about $50 and $60 a barrel? >> yep, exactly right. we agreed exactly with what steve said and the opec minister here at tore advertise. we think this was a very constructive thing that opec did. basically they have now set us up for an environment where we're going to have global oil inventories back at the five-year average level. we haven't been there at the five-year average level for a couple of years. so that sets up oil prices to rise fro

happenedak down what in the and i opec.bia taking a different approach to resolving the situation with these stockpiles? >> we've seen saudi shifting from the pump and will policy will policypump at they had, now they are doubling down on these cuts and getting to the system of giving each member a number of cuts they are allowed to have. and what hasere been new over five months is a they have other non-opec members on but we are seeing more cooperation between saudi arabia and russia. those are the two biggest producers in the world. there's going to be more impetus going forward as we see the saudi's doing more to get the stockpile down. tracey: saudi's taking a lead role and also putting their credibility online because u.s. exports are easier to track. what actions can they undertake to make sure this new strategy works? >> we saw saudi arabia cutting more than they had to in the past five months. they have been making up for other laggards like the right -- iraq that had not cut to its full potential. we are going to

opec ministers are meeting in vienna.e have to the had the official announcement yet, but basically got it from the saudi oil minute centers and others that th s t t oil ministers that they are continuing that nine-month cut, and though we're down 0.2% this morning at 51.25, all in all a successful opec meeting. we did fall during the press conference but we have recovered. it's ban decent run already for oil over the last couple of weeks. >>> democrats on the health financial services committee asked deutsche bank to provide information on whether any accounts connected to president trump have tied to russia. lawmakers sending a letter to the deutsche bank ceo, john cryan yesterday, seeking details on whether loans made to trump were backed by the russian government. the probe is also seeking information on that mirror trading scheme that allowed $10 billion to flow out of russia into foreign currency. deutsche bank already paid 6$63 million in fines as part of that investigation. we talked to max seine waters at this ye

oil plunging on the opec deal.eteran traders on the street, expects the saudis to get more than they got, and it was a disappointment when they did not. we are also trying to catch up with the russian oil energy minister. check out what he had to say. disagreement, they have expanded mandates to read it takes a close look at the market. -- expanded mandates. it takes a close look at the market. they will are needed, adjust behavior, actions. su: that is all well and good. let's go into the bloomberg. one concerns new york traders have, the u.s. oil output, the yellow line at the top, is mitigating against the opec cuts. u.s. oil production is increasing, even as opec is trying to put a dent in the global glut. that is of concern, particularly going forward. thank you so much, we will continue this conversation on opec. let's get first word news with paul allen. lecturedent trump has allies in public, saying they must pay more for security. he told fellow leaders that 23 of the 28 alliance members are not paying wha

opec and non-opec countries are cheering.c deal to extend production by nine months, but crude is trading sharply lower. the market is left wondering, how will they exit this strategy? i sat down with alexander novak and asked him if russia can meet its compliance every month for the next nine months. yes, of course. russia and russian companies, which have taken the decision to adjust production levels, takes this obligation very seriously and responsibly. we believe the value of our --pilation -- corporate cooperation is important. trust between partners is important for us. we value that. trust can be lost in a day. we know that very well, so that is why it is very important for that we stick to commitments and continue building this level of trust. not only do we plan to be conformant ourselves, we urge the other participants to also meet these targets. russiacan i ask you, as being the biggest non-opec member taking the weight, have you had to put more pressure on non-opec members to it on board today? -- to get on board

bothrankly, compliance within opec and non-opec of the five-month period has not been complete.here are supply and demand issues. nonetheless, talking to to your point about hedge funds, the market has been caught off guard. liquidationssome and i expect that to the team to the early part of this week. for the market to stabilize and rebound. >> you mentioned positioning. if you look at the latest data, some moneymakers making bets on $40 a barrel. before we started the show, i was reading the note from goldman and they said they think oil prices will rebound. do you agree with that assessment? tarek fadlallah: i think i do. generally, increasing the view of a $100 oil is something of the past, $80 is also the past. gradually, recalibrating expectations of oil prices. i think that towards the end of the year, we will get a decent pickup and i expect $55 to $60 range. >> i put up a chart for the latest u.s. oil and another uptick. the lines in a blue as they build. and the reference line, do wti price in yellow. also looking at the gadfly columnist, the big question in the oil ma

it's difficult for opec to cut deeper. at the same time it's difficult for them to go back to a market share war. their fiscal situation is so tight. fx reserves are running down so quickly. saudi still has a 12% gdp budget deficit this year at our expe expected average brent price of $54 a barrel. to us, all they can do is extend, pretend and hope demand will come back. that is clearly also a big issue for them in the first quarter, demand has been so disappointingly weak. you mentioned the cost curve of u.s. producers. one interesting note talked about the fact that maybe there's a misunderstanding between the saudis and the u.s. the saudis seem to think cost inflation is hitting the cost curve of the u.s. producers. the note was saying this is not the point. >> that's the million dollar question, we spend a lot of time thinking about that, talking about that internally, trying to understand this. clearly we do know costs are going up. we do know that. if you look at the daily ric rate which has gone from 15,000 to 17,00

withlieve our corporation opec and non-opec countries.cranny who has been covering opec through the week. talk to me about the strategy. i understand the policy of the nine-month extension, but what is the objective? whole the strategy is firm at the moment when we rebalance the market. there's a great piece written by have year as they leave -- javier be in a -- as they leave they leave javier as vienna. -- that saudi arabia is going to do less, the boys and girls at the bloomberg team drilled into the numbers. -- its see their own oil is a bit hot in saudi arabia doing -- during july and august so exports dip to just under a million. this will take you to the middle of the month, the middle of july before it kicks in. they have gone with steady as it goes. you heard on that piece with alexander novak, the russian minister. i just wonder, have they got the wherewithal in russia -- he's by 3000ol -- to cut barrels and more a month -- maybe we should get him a tesla? jonathan: then the saudi's would be in trouble. talk to me about importan

to the opec minutes.ack to you. yvonne: i will be watching out for those hints. first word news with paul allen. greater manchester police of carried out a rate across the city, saying monday's suicide bombing was part of a network of potential terror. six people have been arrested since the attack and security stepped up across the u.k. british and french security officials say the suspect, salman abedi, was known to them. he had recently traveled to syria. his father and brother have been detained in the libya. a suspected suicide bomber killed one police officer and wounded nine more in an attack near a bus terminal in jakarta. the initial investigation shows that were two blasts and the bomber also died. indonesia has crackdown on militants since the 2002 bali bombings that killed 202 people. more threats have come from extremists who sympathize with the so-called islamic state. a pullback in credit will send shockwaves through the economy. the muddy waters founders said he expects china's credit prob

let's stick with the opec story.hey'rena poised to extend production cuts for another nine months. i ran canal past an extension removing one of the last remaining obstacles to an agreement. you are on the ground. you then indiana since the start of the week. give us your sense of whether the consensus around extending the cuts is building. manus: certainly if you go by what is coming through kuwait and out, there seems to be a months. toward nine there seems to be a coalescing around nine months. not everyone is the board, according to the kuwaitis. the algerian saying maybe nine months is off the table. what you have is duration under , the scale of production, and then the grand coalition. can you see more non-opec coming in? really just putting your house in order. you've agreed to do the cuts but you're not fully compliant. going to do whatever it takes to move the market, and he did come up from $49 to $53. our guests will be able to put this in context. in 1998.on barrels three years later they came back and d

opec about to kick off a meeting in vienna.sident trump is at the vatican this hour after meeting with pope francis. more on all of those big stories straight ahead. >> first let's check in on the markets this morning. u.s. equity futures after a mini gain yesterday for stocks. s&p closed higher by 0.2%, following a trend of fractional moves, mostly higher. looks like futures are indicated higher again. dow futures up 12. s&p up 2.5. nasdaq futures up 11 points a bit of a defensive tone to yesterday's dane wigain. the ten-year hovering around the 2.28 level. a bit of buying of treasuries, saw that yesterday. the economic reports have been kind of mixed. the new home sales number for april was weaker than expected after a jump in march. we'll wait to see what data showed today. overall it's been a mixed picture at least in the u.s. the data has been very strong, notably in europe. >> going back to the u.s. markets, underwhelming rally, but four days in a row of that, such that last wednesday's big 2% decline has all but been era

also, does opec cut more?ve had a history of cutting a fair amount of production but we have not talked about that much recently, opec has been destabilizing force over a long time and they could do more. >> 1.2 million barrels per day bucket.p in the why are you making the choice of not going in the permian? >> we have talked about investing and 2018, we are investing and expect to continue actively investing but doing something very different with our capital, buying existing production. what we see in the industry today is a gimmick in the united states and north america in particular where companies are continuing to focus on growth. that growth comes from lying land, in particular, in the permian and investing capital in really to bring more production online at to finance that able go to capital markets which have been receptive in 2015 and 2016 but slow down this year. secondly, they sell assets and they sell assets they feel are lower growth to invest in assets that are higher growth. that is good for

from opec, non-opec, russia?companies are looking for is stability in oil price and i think we have gotten that. it is not about whether we returned to $70 or $100 oil, but having visibility about a floor in oil. it is encouraging we seem to have gotten that around $50. downthey brought expenses as the price of oil has come down. is it a mother of all opportunities if they can actually use cash over the next 36 months to do what companies do? gabriella: absolutely. it is surprising that energy companies are the worst performing when you have these positive dynamics of stability in oil prices and reduction in expensive -- expenses. i would say it is a very interesting opportunity francine: do you see oil trading in this range? i have it between 25 and $55. there is another line of thought that says it's opec cannot stabilize as it is now trying to, they've actually opened the to $40d put oil at $35 to squeeze shale producers out. think they are trying to remove some supply and also leaving that question mark regar

jonathan: we have the opec meeting earlier this week, in fact, we had an opec decision to extend cutse months. i want to fuld in the opec story fold in the opec story in high-yield, and show how resilient energy has been. if you take the energy index and compare it, this is the correlation for crude and high-yield energy. it has completely collapsed and completely rolled over. brian, why has that relationship break and down so aggressively this year? brian: ever since last year's lows, as oil rebounded, the that correlation eventually broke, but i think this is just another testament to kind of the overall high-yield market, whether it is straight high-yield or bank loans, etc. and that is that people are buying the coupon, the income stream and there is not much concern about risk. the problem here in that whole market is there is not a lot of price upside left anymore, so it is a coupon clipping market at best. and if the conditions where volatility stays low, interest rates stay relatively low, economic growth is ok, you can continue to clip that coupon, no question, but i think if

opec.aught up with the venezuelan minister a little bit earlier and he is confident about complying. well,will speak today as the result of the presentation, it normally meets before the joint committee. what we have seen so far is that in a quarter of the year, it draws to -- a sharp decrease in inventories. so we are looking forward to seeing those. >> so reduction in inventories by the end of the third quarter, hitting the five-year average by the end of the year. this message coming from the venezuelans, coalescing on the a la cart menu. six months, nine months, 12 months? venezuela, algeria, russia has the saudi's. the iraqis are due to arrive shortly behind me. is the objective here? to keep the price elevated, moving up? is it to get the global oil story back into balance to beat the u.s. shale teams? what is going on? >> you've just about the epitomized the biggest issue for opec. staying fully relevant, staying fully in command of being able to demonstrate we can hold a price. ae m

novak arrived here, the biggest driver of the non-opec, 600,000 barrels is non-opec.o you get the sense that the russians are -- they were making telephone calls saying get ready for a price cut. guest: they are in a commitment for the optics and it is remarkable they did that. they would not sign up to a statement or agreement. a curious thing happened with russian supply. they have reported lower production but their exports have risen, their exports are quite strong and he gets back to this easy and hard compliance. the russian fields, they are not going to want to keep production low. ands difficult to dial up down there field. you will see some slippage from russia but they will sign up because the russians fear a return to $26 a barrel that we saw last year with the financial markets teetering. no one wants to see that. it is in their interest go along with what are effectively saudi cuts. even: the russians break at 40 bucks, the rest of opec is considerably higher. when i look at the market position, hedge funds, it does not seem convinced about the grand feed

hat how does opec not engage in the share war? >> opec has a choice. and i don't think it is given the efforts on hispanics, then opec either lets the price go down or cuts more. the saudis wanting to prioritize, will cut additionally to try and keep the the ipo go. make but demand is not holding up. gasoline demand will hold up this year and they have another problem they will have to deal with in november. greatest u.s.e this city in demand? what are we looking at? >> it is ironically over the western hemisphere in the united states. and venezuela. everyone talks about the collapse in venezuela. it was consuming 700 barrels per day. 200 barrelsng to per day and the demand is dropping off. up becausebly going they are trying to short-circuit oil. china is pushing hard and that is something we will see on 2020. much.thank you so i will be live out in houston tomorrow. don't miss it. her fingers aren't as free aspect. money to workuts billions to work. where is he doing it? check out tv . you can watch us online. interact with us directly. go to tv

opec and non-opec working together, i think that should encourage investment.ly is on where the markets are going so that people invest. pricesss concerned on over the next 12 months than i am at the end of this decade when supplies may be short, demand will be approaching 100 million barrels and we have the annual decline that has taken place. unless we invest and we overcome this decline with new, significant capacity coming in, we will face a shortage. in saudi arabia, we don't want the market to be squeezed. francine: i understand you are not targeting a price, but i have been covering opec for a must two decades and shale producers are now part of the equation. let's say the cut does not have the effect you want longer term, would you think of overpumping so the price goes down and you squeeze americans out? lid: we never overpumping to squeeze anybody out. i think supply and demand need to balance and we have said that saudi arabia has capacity, opec will do what is necessary. we feel that the market structure was off a few years ago with the divergence b

what is the market position on the news that opec and non-opec may extend cuts through 2018? nice resurgence, but the market -- it was long when they agreed, 1.2 million barrels. we saw that acceleration in terms of getting long. they have agreed to do whatever it takes, and the irony is this -- just as opec and non-opec agree, down go the open positions. these are the hedge fund positions, the real fast money. they cut net long positions by 70% last week. does that give the market the ammunition it needs to accelerate higher? in other words, all the long positions were washed off, so you have a fresh base. anna: 1.6% higher on brent. the saudi and russian language says they are in favor of extending the cut. the saudi oil minister playing up russia's role in rallying support for non-opec countries. you will see how much influence they have. let's put up the risk radar and have a look at the broader equity picture. there's the oil price, the shanghai composite as well. a couple things going on in big investment, infrastructure playing out yesterday and today. then we have the

no matter what they seem to do theyen opec and non-opec, have got to get themselves a little bit more aggressively poised to reconcile their cuts, and that is the direction of travel. anna: we will have more on that fantastic interview on the oil story later on in the program. let's get the risk radar and show you where we are on asian equities. oil majors doing quite nicely in the asian session, up by .7%, s&p futures are pretty flat. on thataway, news domestic front, although the comey news flow could resurface later on today. we will get fed minutes on wednesday, 80% chance of a hike in june. manus: let's talk about dollar-yen. even though north korea tested another missile, it is still slightly more risk on. you got the north korean test, the dollar gaining overdone. you will need fresh factors. cable -- this is great. david davis talking about crisis before it began to lay out the plans. . the article was that the u.k. would be prepared to walk away even before the negotiations begin if this bill keeps being talked about around 100 billion pounds. anna: let's keep an eye on that,

we are getting headlines from the opec news conference. mohammed barkindo saying opec invited u.s. for talks. this is a big development. dividing them for a talk. hasali said earlier that he personal dialogue with some u.s. shale producers and he does not believe there is any confrontation between opec and u.s. shale producers. he said it is getting more costly in some areas and u.s. shale is experiencing cost inflation. those are some headlines out of the opec meeting. next, gm becoming the 6th carmaker accused of a cheating scandal. we go to detroit for an update. this is bloomberg. ♪ ♪ vonnie: this is "bloomberg markets." general motors has been hit with a class-action lawsuit. it alleges that they put devices into trucks to beat emissions tests. they are the 6th carmaker accused of cheating when volkswagen admitted to installing software to bypass emissions rules. first of all, jamie, will they try to fight this or will they admit that this cheating did happen? and maybe try to settle. >> they are fighting back hard and right away. they put out a statement calling the lawsuit b

this is opec's dilemma, there isa back? this is opec's dilemma, there is a new player in town.t in is a new player in town. they can do itina is a new player in town. they can do it in a commercial way, so the challenge for 0pec is, with these cuts, when do they online the cuts? what is the pacing of that, how does the manual group work? we're looking at the extension to nine months because the first quarter is when demand dips and that is not when you wa nt to demand dips and that is not when you want to return barrels to the market. we saw parallels as far as the price is concerned in trying to push shale producers out of business, so there is a threshold, there is no point in getting this oil out of the ground in terms of shale because it is expensive. we have seen technology improve that makes it cheaper to get shale out of the ground, so that argument doesn't work any more? it is a balance. we have seen a number of companies fail, but we have seen consolidation, costs come down and technology improvement has meant it has gone from break evens of 60 to 50. the question we h

opec and non-opec working together and that should encourage investment.larity of where the market is going so that people invest. i'm less concerned about prices and market over the next 12 months than i am after three years, after the decade when supply may be short, demand is approaching $100 million and we have an annual decline taking place. and leslie invest and overcome this decline -- and unless we invest and overcome this decline, we will face a shortage. >> i understand you are not targeting a price but give me, i've been covering opec for almost two decades and the shale producers are part of the equation. say your production cut extension does not have the effect he wanted longer-term, would you think of over pumping so the price goes down. pump to not over squeeze anybody out. i think supply and demand need to balance and we have said saudi arabia has of the capacity, opec will do what is necessary. the market structure was off a few years ago, the divergence between supply and demand and any opec action in 2014 would not have done the job in

the opec meeting, we have a special guest.f energy analyst and waiting for the iranians to arrive. wait.nversation as we welcome. is baked in an 1.8 million barrels, no shock at -- is that fair? >> yes, you look at the monitor committee report, it suggests that there will be compliance, they said that we need nine months. they should stay on board in the meeting tomorrow. however, there is always a however. >> what is a surprise? >> it could be, if they were still not to have -- the committee meeting today is not a confirmation from member might say, one member may say that we do not agree with nine months and just 16 months. -- six months. what if saudi arabia puts pressure on opec members? they went to arrive to have a discussion. look at the five-year average. venezuela -- he said you just cannot say that. give me your sense, someone said the markets are in deficit. do you agree? >> yes, we are in deficit. the first order may have been average but we started off from second quarter in deficit because we see the effects of t

jonathan: does opec comply with jonathan: does opec comply with the latest cuts? gregory: no.. brian: no. jonathan: payrolls, upside or downside? gregory: upside. bonnie: upside. brian: upside. jonathan: that does it for bloomberg "real yield." up next week, same time, same place, 12:00 p.m. new york. 5:00 p.m. london. you have been watching bloomberg "real yield." ♪ david: what propelled you to pick google as the company you wanted to go to? eric: i said, who cares about a eric: i said, who cares about a search engine? i did not particularly think google was going to be that successful. david: is it awkward when you are the ceo dealing with founders? eric: it was an immediate click. we do have a dress code, you have to wear something. david: it seems as if the driverless car phenomenon is on its way. you have been in one of these cars, and you feel safe? eric: we are doing this to save lives. there are 32,000 people are scheduled to die this year. david: europeans do not seem to like google as much as americans do. have you resolved those issues with europe? >> would you fix

markets too much in the by a large group of producers, opec and non-opec working together.s of where the market is going. i am less concerned about prices over the next 12 months and then supplies decade when may be short, and the approaching -- and we have the annual decline. unless we invest, overcome the decline with new significant capacity coming in, we will face a shortage. we in saudi arabia don't want that. i understand you are not targeting a price or want to talk about a price, but give me some specs over two decades and the shale producers part of the equation. let's say your production cut doesn't have the effect you want in the longer term. would you think of overpumping so the price goes down? >> that has never been part of the calculus. we don't overpromise or want to squeeze anybody help you -- anybody out. saudi arabia has a fair capacity, opec will do what is necessary. was offthat the market a few years ago, with mergers between supply and demand. any opec action in 2014 would not have helped in terms of cutting. so with the restructuring of supply and de

in december opec and non—opec countries agreed to cut production by 1.8 million barrels per day — aboutthe price up. those cuts were for a six month period which expires soon. they are now expected to extend the cuts for another nine months or possibly longer. look at this graph of brent crude and you will see why. the price surged in december when those production cuts were agreed. but it's been volatile since then and struggling to hold onto those gains. it now stands around $5a a barrel. russia can cope with this level — moscow has based its budget on $a0 per barrel. but the biggest opec producer saudi arabia wants $60 per barrel. here's the big problem they have. shale oil production in the us fell sharply when prices hit rock bottom so it just wasn't worth their while. now prices are higher they are back in a big way and their technology is improving. you can see us production has surged by a million barrels a day over the past year, adding to a global oversupply of oil. we'll be speaking to an expert about whether opec really has the power to prop up oil prices any further we are

opec has agreed to extend the oil output cuts by nine months according to a new opec -- to the opec delegation. non-opec members like russia will join the latest production cut. crude remaining lower this morning. wti holding right now above the $50 per barrel mark. looking at 50.90 if you could buy it by the barrel. >> let's turn to the markets. the s&p 500 closed at a new record. joining us is steve parker, and doug cotey. gentlemen g to see both of you. it looks like the markets have decidedly turned positive since the big drop last week. the s&p 500 at a new high. what's happening? >> on the economic front things look very good. not only the u.s. and emerging markets are marching forward, but surprisingly europe is marching forward. that's big. even japan is. that's showing up in accelerating profits, broadening manufacturing. consumers. >> not just the markets moving up, but the any oveconomy overa. >> the fundamentals are important, and that's why from an investment standpoint you want to be globally diversified. you are seeing it in the markets. emerging markets are more than doubled. i

and non-opec. your perspective? you can implement cuts. seell the numbers we [indiscernible] 102% global. are producing, not exporting. the market is on the business of exports. you have individual consumption within countries. of the balancing of this market, there has been a huge amount of capital oilnditure taken up by producers. have we felt the impact of that in terms of the production side and refining side? >> we have. bond guys are getting ready to move. we are looking [indiscernible] couplelion over the next of months to one year. global this has not done much. it has been fairly slow on average. an update for us? moving quite well, a lot of progress and work to begin to keep it stable. we are making progress on that. negotiated. a lot of dramatic movement and the structural aspect [indiscernible] there is still in a big -- a big gap. would lik toing i check ite with you. you spoke to me and said if we youinue to refine products are prepared to resign, is that correct to have you a clarifi

given the option comments from options market. >> the big question is now how will opec and non-opec respond to this? we know the opec meeting takes place may 25th. will we see an extension or will we see a deeper cut? will that make a difference? >> sure. so we are still of the view that we will get an opec extension. and this is to do with a few things. the key ingredients for this are still -- are already shaping up to be quite strong. one being iran has already said quite awhile back already that they are comfortable with 3. million b3.8 mill yoion barrels. two key ingredients are there. in terms of going into the meeting as well, it does seem like we will get an extension. >> just to tell you that the brent crude price has\s p tur t positive on the day. you said opec and non-poke including russia may be frustrated about the lack of pricing power that they got. the fact there is such high tolerance to the cost curve when it comes to u.s. producers. is there anything else they can do, aside from the extension? the extension in itself takes time to feed into balances. we had those

you have opec on one side and shale on the other side. little bit predictable so the volatility is taken out of the market, a good thing for high-yield although we prefer it in the investment grade space. jonathan: let's look at high-yield and break it down by sector. the underperformance has come from most retail associated sectors and managing as well. out of those things, where do you want to pick up the pieces? gregory: i think the interesting thing about energy at the start of the year, it traded right on top of the high-yield market so there was no risk premium built in. we are actually still worried about high-yield companies in the energy space, so access to capital has helped balance sheets limp along. but the retail side is definitely this year's energy. we are broadly of warning that. we think health care is a much better sector to play. and it is done well this year. jonathan: on the energy side, is there the risk of complacency now that we have the opec put that some of these shale producers will not carry on with the cost-ef

the first time since opec agreed to cut back in november.he decline driven by extension in the u.s.. the canary in the commodity coal mine. what is the driver? china or supply? all as a new day in commodities. it turned into a bit of a bloodbath. it is oil we are focusing on today and is supplied. prices edged lower. the $45 a it hit barrel level, losses accelerated. fundamentally speaking, we have production.d u.s. that is confounding any attempts to control the market by curbing production. libya, which is exempt from the ats, said its production was the highest level since 2014. pushingthese factors oil lower. next eating. the our expectations coming down because of the lack of ability of opec to control the price right now? the next big thing is that may 25 opec meeting. whether toill decide extend production cuts. agreeinisters seem to they need to extend those cuts as do leaders from outside the group that took part in that agreement. there were some expectation even if they extend those cuts, that will be not enough to halt the declin

opec will do what is necessary.rkets was off a few years ago between supply and demand and any opec action in 2014 would not have done the job. so, with the restructuring of project respected place over the last cheat of years, opec is now able to accommodate supply with our great partners from outside to bring the supply/demand balance and give clarity for investment. francine: two questions. on opec, can you tell me if certainhinking if countries decide not to cut production, will saudi arabia take the brunt of it and cut production more? the focus isalih: collective responsibility. i am proud to say that, although there are deviations we are working on fixing, the numbers speak for themselves. they are well reported. we have historic levels of commitment that have been actually delivered by producers, not only from opec, but countries that have never been tot of such an initiative manage production. they have delivered well on the totality. the market responded positively, as we have seen. therefore, saudi arabia

we have the opec and non-opec meeting.ot of people focus on the ability of opec and non-opec to stick to the commitments. at least the difficulty of sticking to the commitments. it gets more difficult as time passes. >> it looks good that they stuck to the first deal because they were going into maintenance and increase production before the deal. that was a low bar for them to meet. most likely, we get them having 2 million dollars. i think there will be more cheating on the next one. aramco, you need a higher oil price to get it up. an aramco ipotain if saudi arabia is not trying to maximize profit for aramco? they are trying to game the oil market and increase shareholder value. that long-term cannot last. manus: this is one of the challenges that personifies the ever increasing issue for opec. the highest production in the united states of america is 2015. we have come off record output from opec. you just cannot stop this bulldozer. the former head of bp was here the other day, and said that it was just getting starte

opec and non-opec.hat's amazing, we've seen this in the past, the iron ore, even with political tensions around some of the key players, saudis, iran, russia soen, when it comes to opec and non-opec members, they're able to come to a deal and there's been phenomenal compliance. the key issue is actually what's happening in the u.s. the kick-start of the shale oil production there is faster than anybody thought. you're seeing it with the rig count. you're seeing it with the cost of production. they can drill wells a third of the cost and a third of the time now. and, so, the average cost of production is coming down. so, that's going to have an interplay. there are different views but i don't see drastic changes one way or the other for a while. and then the key question, not enough focus always is china. what's really going on with their deals. and the indian growth of oil demand is even faster than china's now. i think there needs to be a little more focus on the demand side as well to truly get a view

not opec that opec and members compliance with the production cut is almost 100%.ill it be different this time around if they extend those production cuts? yeah, i mean, it was easy for them to comply during the seasonal downturn in the winter, harderis a much process during the summer months when they have a lot higher demand at home. so if they want to keep their exports at the levels that they were at in the wintertime while summer demand is rising to a very high level, then they are actually going to basically need to raise their output if they want to keep those export levels the same. so it is one thing to talk about complaints in the winter, another thing to talk about it during the summer. so we expect that compliance will kind of fault or over the summer -- a summer months. julia: how much slippage are you talking about? calculations, over the first of five months of this year, compliance has been about 95%, 97%. the monitoring committee today noted that in april, the compliance level was above 100%. if we seeculations, some of the output slip a little bit

opec will do what is necessary.cture was off a few years ago with the diversions between supply and demand. any opec action in 2014 would not have done the job in terms of cutting. with the restructuring of supply and demand trajectories that took place over the last two years, opec is now able to calibrate its supply with our bring theners to demand balance together and bring inventories down and give clarity to the industry. vonnie: the saudi energy minister. mark: let's stick in the middle east because iran's newly elected president is facing international challenges just two days into his second term. we have more from the capital tehran. >> fresh off his election victory, the incumbent president is looking at a burgeoning and strengthened u.s./saudi axis. the u.s. president saying the iranian government gives terrorists safe harbor, financial backing, and social standing needed for recruitment adding all nations of conscience must work together to isolate iran and deny funding for terrorism. the arabian foreign

opec and non-opec have a whole variety of issues on why they don't want to go back there.enezuela is fighting to feed themselves. qatar has the pay for the 2022 world cup. exit strategy -- they will review. that is the message that came out. vonnie: we would let to stay with you in the and all day, but unfortunately we have to leave it there. that is manus cranny covering the opec meeting. if you want to be that gadfly story he was referencing, check out the bloomberg. mark: sterling falling today and theresa may's party losing ground in the race less than two weeks away. joining us now is bloomberg london bureau chief is emma ross thomas. time. about squeaky bum this is not rude or not he in any way. he would often say it is squeaky bum time and we will get through it. is the squeaky bum time for the conservative party as the polls narrow in some areas 24 percentage points to five today? emma: you could argue that theresa may has been saying that one of the risks to conservatives is that voters would be complacent and bo polls which sh a lead and they would not -- and tha

especially in focus this week was the opec meeting.getting underway tomorrow, two-day meeting. there will be a communiquÉ. we think we know what might be in it, but nonetheless, these are important. julie hyman. julie: larger than estimated drop in inventories and it is the second straight week there has been a drop. as welleeing declines in gasoline inventories. down 787,000. and distillate inventories. all of those numbers are better -- deeper declines than had been estimated. off thekend kicks traditional summer driving season, it being the holiday weekend for memorial day. as well, we're going into this weekend with crude oil inventories about 111 million barrels above the five-year average. work down inis inventories that there has been recently, it is still above where it has been the past several years. we are seeing oil take a leg higher here, much more so than it was earlier. if you want to follow the bloomberg for more commentary ,tlive is your place to go. vonnie: thank you. that is julie hyman. opec is closer to reaching an

but there is stewardship of the market by a large group of producers, opec and non-opec working together, and i think that curbs investment. my objective, clearly, is where thef market is going so people invest. end of this decade, when supply is short, demand will be approaching 100 million barrels, decline,ave annual unless we invest and we overcome the supply and renew significant capacity coming in, we will face a shortage. we and saudi arabia don't want the market -- >> i understand you are not targeting a price, that you don't want to talk about a price, but i have been covering opec for almost two decades. shale producers are now part of the equation. protection cut extension doesn't have the effect you want longer-term. would you think of overpumping so the price goes down and you squeeze the americans out? >> that has never been part of the calculus. we never overpumping to squeeze anybody. i think supply and demand need to balance. we have said that saudi arabia has fair capacity, opec will do what is necessary. we feel that the market was off a few years ago, with the divergen