opec andt for that, non-opec would have to do more.bviously yesterday we didn't have any indication they would do more, so i think it will be a difficult time for them. shery: at least when it comes to prices, richard, we are seeing a significant drop in saudi shipments to the u.s. we know the failure to drain that u.s. storage tank has been a major factor in driving oil prices down. how much will this help? saudis, obviously the u.s. is a very competitive market, so placing your oil in that market is not always so easy. the saudis probably have more interested customers in other parts of the world, particularly here in the asian market. obviously, the u.s. oil market has an abundance of oil, conventional oil, shale oil, latin america, that it can pull in. i don't think that necessarily has any huge, overall effect, although it can have regional imbalances. overall, i don't see saudis reducing shipments reversing the price trend. yousef: richard, hold that thought. the unitednes -- arab emirates second-quarter revenue coming in at re-.

opec here in st.head of the meeting, we spoke to one of the key people close to the global trade flows when it comes to crude oil, the head of commodities and research at bank of america merrill lynch. here is what he had to say about opec and non-opec attending to rebalance global inventory. >> here is opec's this challenge. thempact prices, it takes three to five quarters. for sale supply to respond to prices, it is about three to five quarters. while opec is peddling backwards, show is peddling forward. -- shale is telling forward. you are lowering a market share because you know shale will make up the extra supply. you can try it, but look what happened to u.s. supply. toting deeper is only going be sending money from the middle east out to texas, to west texas. >> that is the fundamentals. talk about the collapse in sentiment. most mornings of the last couple of weeks we've woken up to another bank with another note, a bullish view and then capitulating. we have this average view, $64 billion. ev

opec and not opec oil ministers are holding a meeting in st. petersburg.ndent, holly are blessed. you always make me -- javier blas. you always make me smarter. what did you learn from the news conference? takeawayscouple of that seem quite appointment -- quite important, first of all, the saudi oil minister said saudi arabia will continue to lead by example. i took that as they are going to try to bring production below the level of the quota they went at last month. also, he said they have been told refiners worldwide that there will be deep export cuts from saudi arabia. we were expecting that, but it was interesting to get that confirmation. also interesting that -- one of the consensus of the market has been whether the exit strategy for opec. the response from the ministers was what exodus strategy? we don't need one because we may extend production cuts beyond q1 of 2018 and i think that was key. francine: i think we have the opec president speaking to us. -- contributions. successful and we are looking at the second half of the year. as you reporte

it has been coming from opec itself. it has been coming from opec itself.from more production from libya and nigeria. when we get deeper into the year when opec and non— opec have their nextjoint ministerial monitoring committee meeting, it will be interesting to see whether opec members who are bound by the restrictions agreed to do more or not. that is the question that the market is beginning to ask opec. from urinalysis, what effect do you think donald trump's energy policy is having? his policy, with respect to oil, i don't think will make much of a difference. i think from a trump point of view it is about promoting us energy and i think he is right in the sense that it turns out that the us has far more producible oil and gas than people thought a few years ago and he has made his point clear about promoting that rather than, as he would see it, restricting american investment in energy. that includes why he pulled out of the paris climate accord. many thanks indeed. keeping inflation steady. china has reported inflation figures that hardly moved sin

non-opec group.ake some time to phase out this kind of intervention after the first half of 2018. it won't just look at the agreement, everybody's going to reach the excess, the most excess supply. until now, we are not sure. there is notre actually supply, we are not even sure about the demand for the producers. agreement -- if the climbing of the global investment continues. yousef: we'll have to leave it there, we're out of time. we have plenty more to come. dubai.s 8:30 and in you are watching "bloomberg markets: middle east." trading the u.s. are blame over a naval incident in the persian gulf. said said a u.s. -- tehran a u.s. aircraft carrier fired a warning shot in what kuwait is calling on professional confrontation with iranian vessels. the u.s. navy said they were forced to fire when ships were unresponsive to attempt to communicate. the brother of a former pakistani leader is being lined up to be the country's next prime minister. he will contest the national assembly. he stepped down fri

to account for that, opec non-opec would have to do more.dn't have any indication they were going to do more, so i think it is going to be a very difficult time for them. sheri: at least when it comes to prices, we are seeing a significant drop in saudi shipments to the u.s. we do know there's the failure to drain the u.s. storage has driven prices down. how much will this help? guest: obviously the u.s. is a very competitive market. placing your oil in that market is not always so easy. the saudis probably have more interested customers in other parts of the world, particularly here in asia. the u.s. has an abundance of oil that it can pull in. i don't think that necessarily has any huge overall effect. it can have regional imbalances, but overall i don't see the saudis reducing shipments to the u.s. as being in any way going to reverse the price trend. yousef: if you were part of the group, how would you deal with this? guest: it is very difficult. again, you can be try to reduce it by another million barrels as we go into 2018. that would

anthony: it is hard to say what more opec could do.g about apricots and some of the analysts -- there talking about deeper cuts and some of the analysts are saying they need to take more of a significant chunk of oil of the market, but it is hard to see what they can do it does it is hard to see them doing that. they talked about bringing libya and nigeria back into the framework of cuts, they were exempted earlier because they had disruptions due to discord, terrorism, internal fighting in those countries. nigeria is coming back up. you nigerian minister was talking about if they do get back into the framework, they would be willing to put a cap on their production after about five or six months of the production being at that level and stabilizing. a cap on production of the high it doesn't do anything the markets because it allows those countries to come back up. again, that is politically a difficult thing to get through and hard to see how it would impact the market. producers toher take root of the market, if you do that and get

much for giving us context as we look ahead to this afternoon opec and nonopec meeting. i am looking at the board, seeing a sea of red in europe. let's look to see if there's a read through to the u.s. market, that's indeed what we are seeing, dow-jones is expected to open 24 points lower, nasdaq up 7% look at european markets themselves are holding up, not well at all. it is a sea of red the ftse, italian markets are keeping their head above water, quarter percent higher auto stocks are down so far this morning, seeing dax not doing so badl badly. >>> let's look at how currency is moving. they were enormous last week euro hit a two year high against the dollar as of friday, it has come up in light of weakness in pmi, nothing dramatic just slightly ahead in front low in germany, one-tenth percent. look at tablcable, pushing above that 130 mark. >>> britain trade secretary in washington to meet with u.s. officials to discuss a post brexit trade deal, after he said he supports transitional arrangement of two years to ease britain's departure from european union speaking on

thed: make or break, meeting of opec and non-opec and what it could mean for oil prices.s is bloomberg. ♪ ♪ the massive disruption taking offshore, so and we are sure the rebalancing going on at a slower pace than earlier projected. it is on course. it is on course, and it is bound to accelerate in the second half because of the numbers. month time frame, things are playing out as expected, and our outlook for the later half of this year and 2018 is a tight market that should reduce inventories. if the market is calling for , they may have to react in at least a small way. >> there is real risk of a domino effect. some oil ministers have said different things. they will not adhere to these targets. iraq a says they want to produce 5 million barrels a day. difficult to see why nigeria and libby would cut when they are recovering output. if you put that together, you could see a material stock build. ray of views we have been getting on bloomberg about this opec meeting in st. petersburg. let's get more on that from our next guest who sees oil supply growth lagging demand g

they need to reassert this opec, non-opec position in the markets.r. back in our new york studio is michael shaoul, marketfield asset management ceo. the underlying some diplomacy, globally, being more difficult than it was, five years ago? world at aearly, the geopolitical level is a messy place. this is something you pay attention to and you hope it stays at the level that it is and is not escalate -- and does not escalate. i think we are now three years into this process of fixing this huge imbalance between supply and demand. i think we are getting close to the endpoint. supply side is being talked about, and nausea. that was the drive in what made oil go down. what is being missed is that demand has actually picked up, particularly in china. i think we are getting to the point at which oil may show itself to be rather more sensitive to this kind of issue, going forward. michael, staying with us to talk about dollar strength or weakness. you can watch our programming on tv . it is on the right-hand column. you can send us a question. this is

opec countries are set to meet again on monday. more on that let's talk to our financial correspondent on wall street. jens, good to see you again. opec output seems to be a big mystery sometimes. we hear it is higher and been lower. how confusing is this for investors? >> we have heard this week is that opec member ecuador is pumping more. it is a smaller producer of oil but still out of economic despair, they are not holding to the quote is opec decided on a month ago and talking about monday, that is when opec will review how the production cuts worked out. will prices on wall street traded sharply lower, losing a good 2.2 percent --2.5%. oil stocks coming under quite some pressure but overall it was a quiet trading day. brent: it was not a quiet week, several reports including general electric and visa, what are the takeaways for this week? >> overall earnings season is well underway and the numbers came in mostly better than expected but we had to somehow --at one side we hit the dow jones industrial average which depends heav

opec nations.loring new measuring market activity, including not just monitoring production, but taking more into consideration export data. they will be able to gauge at how these global oil flows are faring. the saudi position are fundamental. have to see how the data shapes up beyond august. we started with the premise that nigeria and libya, that are both exempt from cutting, will be allowed to increase output to their target levels. here is the question -- global struggle to actually achieve those targets and levels? is that the belief by countries like saudi arabia? that is what they pointed to, the saudi energy minister. they do not expect a lot more upside as much as they wish libya nigeria would -- libby and nigeria would. is a sustained story out of the two nations, that could lead to another conversation as it would be part of the conversation in terms of reviewing come and see how onryone is doing on anne -- an opec level. there is a question of how much they can grow from here? the bar

production and opec production.ith me and you can see the opec daily production is actually increased from the last data point. they have come down a little bit but they are hovering at the highest level in some three decades. what is going to turn this around in favor of a more bullish story? you are saying it is to bearish. the data points to eight average story. anas: the other side of the story, if you look at u.s. oil production, the weekly data dataally is kind of fuzzy and we cannot depend on weekly data that much. stalled.roductivity if you look at the account, it basically is increasing in areas outside of the shale, if you look at inventories, they are declining. opec compliance is still really good. there are all of those kinds of bullish sides to the story. you look at the saudi commitment, for example. we can't look at that and say, based on saudi interest. we need double digits. rose and get double-digit, that would do it. tracy: you are not the only one who is planning some of the oil price increase o

home to most of the country's oil production maintaining its position as the unofficial leader of opec but it's also home to the shiite minority and any inspiration from outside states like iran could cause a rift in the country and put a dent in oil and we know that saudi arabia and the rest of opec can't really afford that right now over the past year west texas intermediate which serves as a global benchmark has settled around forty five dollars a barrel as you can see in this chart and it's been hovering around that mark since two thousand and fifteen about half of what it was in the years prior before two thousand and fifteen crude oil was selling between eighty and ninety dollars a barrel and still has yet to recover meanwhile iran's oil minister is saying that they'll be pumping four million barrels per day by the end of the year based on recent numbers it's not too hard to believe because of previous sanctions iran was exempt from opec ordered production cuts and once those cuts were lifted iran has been trying to it's hardest to make up for that lost market share so when you t

his opec still producing? whatever ground they manage to gain, you have u.s. shale, u.s.ion filling that gap. daniel: when you talk about the swing producers, is usually high cost. opec is on a cash cost basis. they think the u.s. shale producers have taken that spot essentially. they will react to the market forces much more quickly. and at the moment, they are responding to the relatively good prices compared to the level of cost at the moment and pushing additional supply into the market. haidi: where does it reach a level that does not happen? daniel: we are in a sweet spot at the moment. you can only get five dollars or so on the downside with the u.s. tole react, but if we push back on taps turned again. you are in the middle. haidi: are you looking at mostly largely supply-side dynamic at the moment, or are you looking at demand? daniel: at the moment demand is relatively ok. we saw a bit of a weak patch earlier this year, but things are picked up in the u.s. it is not a game changer, but against the broader commodity complex, better macro backdrop coming through.

we look ahead to the opec meeting.h earnings and eco-data, the -- trump'sntial ties potential ties to russia and a decision on the interest rate this week. su keenan is here to talk about what to expect. a it will be buckle-your-seatbelt kind of week. gdp data at the end of the week. anticipation we will see annual growth 2.6%, gross domestic product, and that is based on an increase in consumer spending, very different from the start of got off toere we a slow start. durable goods expected to show a pickup in factory activity. middle of the week, tuesday and wednesday, the fed begins its two day meeting and will announce on wednesday whether to raise rates. that's in a statement, not a press conference. they are expected to stand pat with investors and economist parsing this statement on how they plan to proceed. the fed is in a bind trying to explain their tightening path amid a data miss, inflation nowhere near target goals, even though it referred to it as robust, and trump, the headlines will probably, the russian

all the acting outside, people are going to really question what opec is all about.going to be quite crucial. oil prices will come under increasing pressure if they don't get what they want. now, cirque du soleil is looking outside the big top ina soleil is looking outside the big top in a bid to diversify. it has approached the us company that owns the blue man group. we find out what's behind it. cirque du soleil is putting the spotlight on this chinese city, where they planning a permanent show. we asked why they are doing this. we see china as being the next market where cirque du soleil can really establish themselves in a very strong way. in announcing this tour, they have got the right shows tour, they have got the right shows to enter the chinese market for the next 14 months. what are some of the difficulties of going into such a tightly controlled market? cartel in each with marketing is to make the chinese understand what cirque du soleil is all about. we're not a circus, we are dance, music, cinematography, we a different kind of show. we will put in a lo

so what can opec do?t other than that, there are not a lot of options. jonathan: so what is the scene for crude? francisco: it depends on geopolitics. we have seen it get nasty in the middle east with the qatari-saudi diplomatic breakdown. the venezuelan situation deteriorating. there are apparently some measures being considered from the trump administration on venezuela. there are a lot of things that could take us higher. thathan: do you think there may be a flaw or ceiling, so when crude flows over at a certain by point, shale goes up. you think in those terms? francisco: absolutely. the range is narrowing. we saw it in natural gas in the u.s. the last 6, 7 years. this is shale part two. we know what shale part one looks like a. increasingly, we are realizing that there is a central prize about $50. it could go down, it could go up. most likely, it goes up. opec will be dancing around that. but having less of a marginal impact on prices. this is the time to take a huge amount of supply out, but that c

happening now, opec and nonopec ministers gathered in st.etersburg, russia, they're holding a meeting to discuss global oil output. speculation is swirling that the group could ask libya and nigeria to join in on production cuts right now, both those opec nations are exempt from a deal among major oil producers to cap output more on this later in the show, certainly crude prices hovering. see if that has any impact 45.94 marginally, third percent higher. >> steady friday, dropped in advance of the meeting curious to hear what happens there. >>> in washington, president trump meets with a group of people the white house is calling victims of obamacare he will then make a statement on health care. in a warning, he tweeted if koips don't repeal and replace disastrous obamacare, repercussions will be far greater than any of them understand >> tweeting quite a bit this weekend. >>> in other washington news, the president's son-in-law jared kushner will sit down today with staff of the senate intelligence committee. he is expected to be questioned

the problem we see is opec aims to cut stock piles. they have not responded yet did we have not seen that yet. rises this time of year. if they would cut another billion heralds a day, you might start to see that more quickly. vonnie: that is a great story by our colleague in the last two hours. this is about peak oil coming. i thought we were past peak oil at this point? will: it's a different type of the. the oil industry is worried about demand. tos is the macro background the discussion we are having. how long will opec have any sort of leverage over the oil market? these are great shifts we are seeing in global energy to people shift away from oil. it is striking how much people are talking about electric cars. volvo won't make any cars without electric or hybrid engines. what does this mean for oil demand? will it keep? -- peak? will they face a future where no one wants to buy their products anymore. others agree. it's an existential stretch -- threat. will: they have the most to lose. they have a list of a lot more demand to gr

but that is opec's business. but that situation is somethin which is becoming increasingly important. >> is it hitting confidence at opec itself? opec compliance slumping to 78%, lowest rate this year. do you think it's because of the frustration that you just mentioned over libya and nigeria? >> no, i don't think it's necessarily related to libya and nigeria. the point about the opec deal is that the deal is -- the success of the deal needs to be measured over a period of time. and what we've seen in the first six months of the year is that the compliance rate with the opec deal is actually very good-bye historical standards. well over 90%. okay, we've seen a lower rate of compliance in june, that is certainly true so we'll have to wait and see how the other countries react because there are some countries within the opec family whose compliance rate is significantly below what we expected and of course there are other countries such as saudi arabia, biggest producer of all, which is most certainly meeting its c

petersburg hosts opec and non-opec oil ministries. yvonne: the other factor is, the u.s..ontinuing to see more doubts on whether the opec cuts will work, given the resurgence in u.s. shale. ramy: as these cuts have been taking effect, u.s. shale has been seeing this as an opportunity to take market share. hop into the bloomberg terminal one more time. take a look at the white line. the white line is the active u.s. a rigged count, rising since the middle part of 2016. we stand at 756, as of the last weekly count. look at what is been happening with a wti and brent, falling ever since your to date. -- year to date. it is an advantage for u.s. shale. according to citigroup, this is the sweet spot, in between the red lines, the $50 to $70 mark. we see that because wti and brent have fallen below this. we see active oil recounts falling. it will be interesting to see where this goes as the price rises or falls. looking ahead to july 24, just 20 days left. yvonne: a little bit of a turn in fundamentals. coming up, japanese re-sailors relieve earnings this week. we look at the c

if you were opec, would you do some policy adaptation here?be it is antiquated for you to put policy in stone and leave it like that and expect the market to work around that. >> i think the challenge for opec, and it is something we've seen from previous meetings, when people were discussing the possibility for further cuts, many members were saying never mind cuts, let's comply to the cuts we agreed on. i think the key for opec right now is to show strong compliance and show the market they are actually delivering on what they said they would deliver. that is a key challenge for opec, i think that is what they will try to achieve, and if they achieved that at a time when inventories are declining, they should eventually come into price action, as well. yousef: up next, the take on the crisis in the gulf. find out which assets stand to win or lose in the long-term. with no signs of the diplomatic standoff dying down. this is bloomberg. ♪ ♪ yousef: welcome back. with the gulf diplomatic dispute in its second month, what have institutional inve

well probably more more of the latter but you know i know that a lot of the opec countries there are low cost producers of oil and they certainly want to maintain the fear in the global oil markets that prices are going to fall because they want to discourage more explanation exploration and production coming from other areas like the united states and so to the extent that producers are on edge that lenders are worried about a potential fall in oil prices then they're not going to want to lend and people are not going to want to make the investments in the sector so all that ultimately benefits bigger you know producers like opec to the extent that you don't have the future supply because people are gun shy about committing resources because they're afraid that the price of oil could collapse at any moment all right thank you so much for weighing in on this very important to keep track of all this thank you so much peter schiff c.e.o. of here pacific capital. time now for a quick break stick around though because when we get back the e.u. is banding together to tackle bad loans and

opec has a grip on supply and demand. i want to bring in the co-lead at the henderson utilities and energy research. how much of a factor in your forward outlook is what comes out of this particular opec meeting? noah: thanks for having me on today. the opec meeting was pretty much a nonevent could we did not get a deepening of production cuts. truth be told, that was a low probability event. we did get talk of future production caps out the at at levels higher than those countries are producing today. in terms of a forward look, there's not a lot i cannot of today's meeting that would impact our outlook for oil prices. vonnie: we have this wonderful function that i'm sure you know of -- opec go. and know exactly how much of the oil market each country produces. saudi arabia, the total monthly is about 31%. you can see which countries belong and which don't. saudi arabia has pledged to sort of not comply with its own quota. it has exited produced less than it can produce under the agreement. is that the equivalent of a cu

from the opec oil meeting in russia amid concerns are opec members that their plan to cut productionivities this monday morning. dow futures are down 24 points. s&p down 4.5, nasdaq down nine. a lot on this week started with existing home sales today. you are watching "fbn:am." ♪ [ indistinct chatter ] [ intense music playing ] it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the e300 for $569 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. i am totally blind. and non-24 can throw my days and nights out of sync, keeping me from the things i love to do. talk to your doctor, and call 844-214-2424. lauren: ready for sports? american golfer jordan spieth delivers an epic performance in the final round of the british open. jerrod max is here with the highlights. >> good morning. jordan spieth is king of the hill. he thought he was on the titanic on the 13th hole yesterday when his tee shots at 120 yard

sure of at the moment is that although the opec cuts agreements and the non-opec cuts agreements, for months as a whole as it has been operating so far, has been reasonably successful. for the month of june, the latest data for which we got reliable numbers, the compliance rates have slipped a little bit. it we will have to wait and see what they decide. opec is responsible for its own decisions and we are observing it, just like everybody else. scarlet: is there anything opec can actually do to regain control? we have never seen opec and russia hold hands like this. when you look at the oil rigs coming back online in the u.s., are they powerless? when you look at the oil rigs >> the u.s. situation ise interesting because when the u.s. was ramping up initially, the first part of the revolution a few years ago, to the extent which production increased took everybody by surprise, and when $50,rice went from $100 to the resilience of the shale sector took everybody by surprise, and the resurgence, to some extent, confounding us. but it is not just the u.s. shale producers. another factor

opec is getting -- fighting harder to hold the reins.de of that, you have taken of you in terms of oil so tie the two together for me. foros: we had downside risk oil. this was primarily driven by a positive supply shot. producers are becoming more efficient. there have been some challenges for knitting production between non-opec members but looking forward, we believe that more ballast which also suggests most of the downside we see and commodities is behind us. looking into the long-term we believe the trend will be lower. china is on a downward growth path. emerging markets are becoming more energy efficient. manus: you have made two key points. the shorts are getting a little bit squeezed. will canada all caps on last moment with -- all caps a last-minute in terms of doing a rate hike and changing rates this summer? thanos: they do have a housing mobile which is difficult to address with monetary policy. you do not want policy to be to lose but you cannot tighten too fast. the fed is tightening so this makes their job easier. they w

this after the opec-non-opec meeting had saudi committing to cut exports.-i put -- non-opec countries might put a cap, we are seeing to bti higher than the day before the opec deal in november 2016. manus: saudi arabia has promised to cut the crude exports next month and emphasizes that it is committed to a limiting the global supply glut. wereas fellow opec members told you are free to keep increasing your output. anna: opec production will be capped at 66 million barrels per day in august, one million lower than a year earlier. he added that -- what he expects from all opec members. acquiring the participation of each and every of the 24 countries. and all of us benefit equally in on thef the impact health of our industry and the economic returns. we are going to continue to forcefully demand participation by all. manus: let's get to st. petersburg. great work over the past couple of days. how do you assess this meeting between opec and non-opec, will they walk away and say yes, this was a successful get together, saudi arabia doing the heavy lifting agai

of course, you have this big opec/non-opec strategy going on to take 1.8 million barrels a day off the teenagable and i mio said if necessary, he and his allies in opec would possibly go longer on cuts and go deeper as well but not specifying as and when they would take such a drastic step. i also spoke to the ceo of saudi aramco telling me, yes, the partial ipo which would value the company as much as $2 trillion was sti for 2018. and, of course, some in the market had cast doubts on that given the fact we're trading up much lower oil prices, and, of course, the saudi state would like to see the selling off of part of one of its key assets. this is steve sedgwick for "nightly business report" at the world petroleum congress in istanbul. >>> other wildcard for the energy market is u.s. oil production which has been increasing adding to supply and pressuring prices. as jackie de-angeles reports, the trend could very well continue. >> reporter: now that the 4th or the peak of the summer driving season has come and gone, the expectations is oil prices will start to fall. that swelling u.s

rishaad: what are people saying about opec?ve a realization that perhaps the agreement they made a little over two years ago was a no go? seems to have lost the ability to be the swing producer, to dictate what is going into the market. specifically, because of the u.s. and shale. opec really have to stick to its guns here. through and to work anddrain that global glut has to hope the prices will take some of the u.s. production -- it is the key factor in the market that holds the markets what is happening. atie: still making a profit $38 to $43? that is interesting. ben: some producers could make profits in the low $20's. angie: thank you for that. are weanings themselves off short-term debt with little help from authorities. -- tos expect negotiable drop this quarter. emma in we're joined by beijing. why is this important? you said, we are talking about negotiable certificates of deposit, these were introduced in 2013 as a lifeline for smaller banks here in china. we surveyed traders and analysts, and the majority say , comin

we have the opec meeting planting some seeds.oking ahead to data when it comes to industrial production out of china. let's go to sophie for a look at the shanghai hong kong fair. sophie: and the rest of asia, it has been a fairly optimistic day. when you take a look at what's going on with chinese markets, it's looking pretty much little change. the same with the hang seng. that could perhaps be extending its rally. the stronger dollar, we have the offshore yuan still orbiting 6.75 levels. this morning, we did get a pboc slightly weaker this morning. this could draw into the question of what it means when we have the closing of the yuan diverging from the pboc's reference rate. we have citigroup mizuho wondering if this could signal possible intervention for the currency. another currency to point out is what's going on with the aussie dollar, down about a 10th of a percent. we have data out of australia due out tomorrow.this could be another factor that could stall the aussie value. it has been fairly strong so far, but we are

russia, and it was making allowance within opec for specific members.t even at 45-55, shale can come on stream much more than people expected. so now we are looking at a lower oil price, and we are going to look at this continuous disruptive technology coming in, so people have to understand what is happening on shale much more and incorporate it a lot more into their analysis. >> there is no question that shale has transformed the oil industry, but talking more generally about commodities what is goldman sachs looking at, frankly what other banks may have seen already, because other big banks have already cut back on the commodity trading business -- what is it they could be looking at to say this is not such a great business, or at least we should fundamentally change how we engage in it? mohamed: i do not know. i do not know what they are thinking. but i do know that there are structural changes, not only on the supply side for energy, but we are also looking at structural changes on the demand side. changes in the commodity intensity of production,

it is a catch-22, opec used to benefit from this.is getting squarely hurt by it. >> i know you used to be in houston which means you know that the shale story is as much a story about capital markets conditionsinancing as anything else. chances -- give us some color on what the financing picture looks like for shale only transparent market drillers? are investors ready to put their money in these companies? even with oil prices drifting toward $40 per barrel? >> that is a great question. back 5, 10 years ago when it was taking off right after the financial crisis in the u.s., people had cut rates to next to nothing. people were looking for any way to get a return on investment, they were really happy to give money to toward $40 per barrel? shale producers even though the technology was not all that proven. it was really expensive to drill. you needed hundred dollars oil to be able to make a profit on it. i think what we are hearing from analysts and companies is that has flipped around. the technology has improved so much. they have

all that has been shrugged off by the secretary-general of opec rid this is the monitoring -- opec.age,a lot more they can make recommendations about how to move forward. what this state of play is with a --ia libya -- late jerry nigeria and libya. that is unlikely to be high on the agenda. that, again, is going to be something to watch for as to whether there is going to be any for the recommendation. a bit of further refinement. matt: let me jump in here. we see oil in a bear market in has been stuck there for a while. it has not been moving very much. what are analysts saying we can look forward to as far as price action? even as opec is trying to curb its output, the u.s. crude inventory has continued to rise. frankly the output cut is not really that great coming from a all-time record high. exactly. that's what makes this very tricky. they have to take a lot into consideration. childan is on the bearish -- site. -- dsid -- side. they're saying there is a risk of a domino effect here at the next meeting. are expected to be built globally. we are seeing scale output growth by on

opec is trying to head out and find a way to balance output the u.s. says hey we're going to do you know we're fracking we're drilling we're going gangbusters the u.s. is still importing there's a lot that isn't talked about with regard to these this output and the glut so do you think this political tip for tat between these member countries the united states is is dressed enough or do you think it's just sort of you know smoke and mirrors. well probably more more of the latter but you know i know that a lot of the opec countries there are low cost producers of oil and they certainly want to maintain the fear in the global oil markets that prices are going to fall because they want to discourage more explanation exploration and production coming from other areas like the united states and so to the extent that producers are on edge that lenders are worried about a potential fall in oil prices then they're not going to want to lend and people are not going to want to make the investments in the sector so all that ultimately benefits bigger you know pro

one of our top stories, opec , the total estimated production of opec.e is now producing more than million are also day. by the time opec in november, there will be screams unless something dramatic happens, if the market continues in this bandwidth, you will hear clamor for them to do more, but is there an appetite? >> there is little appetite with stretched finances and a lot of opec countries. also through nigeria in their. a number of countries exempt from the production cap who for geopolitical reasons were given leeway. will pressure come on them to participate? that is a plausible scenario, but goes to show something i have been talking about for six months, the geopolitical stability of the opec group means, which is fundamentally more unstable since the arab spring, makes comparisons with 1998, which a lot of professional analysts are drawing, very inappropriate in this cycle. there just simply is not the desire to impose short-term pain on the population. effectively public works programs will continue at lossmaking to represent a geopolitical

if evidence of further opec actions are needed to bolster prices, but go to abu dhabi., what are the likelihood of declines or a drawdown in u.s. crude stockpiles? >> the reason this report from ,he very -- the goldman analyst one of the more bullish guys when it comes to oil prices. the reason it is interesting is because he points to two factors. opectiveness of ok -- policies, but whether or not they will extend those themselves. when it comes to the effectiveness, this is what he is talking about the need for sustained inventory draws and cap reclines. the -- declines. last week it was already back up. when comes to further action from opec, it starts to get dangerous for the group here. we had the saudi energy minister saying that opec was prepared to do whatever it takes when it comes to rebalancing the market. they delivered, they said they were going to extend the agreement by my nine months instead of six months. it has not proven to be enough. the danger here is that the market really starts testing the bill for further action. opec finds itself in a downward

. >>> here in istanbul, minister alexander novak tells cnbc the opec/nonopec deal is having an impact on oil markets and more could be done to cut supplies. >> translator: if necessary, we can extend the agreement if necessary, we can increase the amounts that need to be reduced, or on the contrary, we can move to reduce them, but everything will depend on the ongoing situation. >>> the white house defends donald trump jr.'s meeting with a russian lawyer last year as a new report suggests he knew the person offering compromising information on hillary clinton had russian government ties. >>> and open for business! we speak to a number of france's top executives at the europlus conference as the chairman tells us brexit will be a boom for paris. >> we have now plenty of the elements in order to convince the uk to reach institutions which want to come back on the continent to paris >>> well, it's a mixed bag for the european open just an hour after trading starts, resulting overall in the stoxx europe 600 being down by around one-fifth so far today let's have a look at how the individua

opec can maintain circular -- certain ranges for a while.successfully maintain 40-50, but that is within the context of a secular decline. you have to be very careful on where you invest in the energy to make sure you are protected, either through balance sheet or through something else, from what is likely to be a secular decline in energy crisis. yousef: let's pick up with the ideas and widen it out. the head of fixed income research at emirates. great to have you back on the program. is happeninghat with u.s. 10 year yields, it has been a fascinating week. , the inflationy and where that goes off the back of an oil price that does not know how to set its tone. where do you see inflation going and how will it affect your view as to where the tenure paper will go? it is a 35-40 range, it is higher than where we were last year. last year we were at 132-135 range. premium,ok at the term which requires inflation, it would actually justify even lower than the level we are in. the 10 yearing yield high is basically the expectations that may be t