we speak to one of the pure permian players in the lineup. welcome to "bloomberg daybreak" on this tuesday, march 10. i'm alix steel. thank god it's not monday. basically, whatever sold the hardest yesterday is rallying the most this morning. it can't go any higher than this, but it can trade lower and trade around that band. anything that was down is now up. dollar-yen taking a big boost up. the safe haven bid comes off. the selling in the bond market is not as fierce as the buying and the equity market, something to keep note, as the 10 year yield rises 19 basis points. crude getting back may be half of the losses from yesterday, up by about 10%. we will see. if that can hold. time now for globe -- we will see if that can hold. time now for global exchange. our bloomberg voices are on the ground with this morning's top stories. we begin with the markets. stocks stabilizing globally following the deepest equity route since the financial crisis. joining me now with more is bloomberg's dani burger. : s&p futures hitting their upper band limit,

mike: we were guiding this year took capital spending in the permian over $4 billion. reduced that by $2 billion, so thing about it coming down by half. permian production earlier this month at our investor day, we had indicated would exit the year somewhere north of 600,000 barrels per day. we are bringing that number down by about 125,000 barrels a day. a significant impact from what we had laid out just a few weeks rigs,s we standdown standdown completion cruz, and really ramp -- completion crews, and really ramp activity to a much lower level. alix: can you give me some insight into how you are thinking of the oil price trajectory? if we stay in the 20's for x amount of months, then we have to revisit our capex spending in these areas? mike:mike: we look at a number of scenarios. oil price is maddeningly difficult to predict in normal times. it is impossible to predict in times as uncertain as those we are in right now. .emand clearly is off in some parts of the world, very dramatically. it is not clear what we will see -- clear when we will see economies open up a

we think the permian will actually shrink this year.e thought it would grow more slowly. now we think the production from the permian basin is likely to shrink. the only reason you won't see its ranking faster is that some of these firms have forward demand. you will see shrinkage across the industry. michael: as everybody looks to the federal reserve to pull it out of this, what is your message to people who may be sought chairman powell yesterday say we are probably in recession now? messagean: well, the is we knew we were going to be in recession. it is a self mandated recession. it is a different kind of recession. normally, recessions things we avoid at all cost. this is a recession that we have induced. we needed to do this in order to fight this virus. having said that, we were strong before we went into this, and a chance tohave come out of this very strong, but the message is everything the federal reserve is doing, and in addition, all of the fiscal response as you are seeing, are with the intention that as we defeat the virus

the most you could say the brawl matter is the only lower permian locality in the world well tracks prints and the track makers that is skeletons basically be found in one layer. to fins and this guy used to be a common academic consensus was that no one would ever find body fossils in this kind of reddish brown vine green rocks. i guess some academic opinion shouldn't be written in stone. of. thomas martin showed the consensus to be mistaken with the help of a bone he found as a young geologist at the borough market quarry in 1974. we weren't actually looking for bones for execution it happened by coincidence one 1st i didn't recognise it as a bone i thought it was a part of the stone just by but then i repaired this white lightning and saw it as a bone as. my then teacher professor on know him on miller and fly back wrote to me . mr martin's you didn't find that here it can't be funny so there's no such thing here services. subsequently except that it gave me a symbolic pat on my shoulder and from then onwards i came back here every year so . at the end of the 19th century a footprint le

paleontologist at clayton stein castle in go top home to 290000000 year old treasures from the lower permian period martin spent 40 years digging through the earth's history on the site and who know hopes his time will be similarly fruitful. the bone marker in the thuringia forest is a very special fossil locality. a season you could say the brawl marker is the only lower permian locality in the world well track sprints and the track makers that is skeletons basically be found in one layer question i'll sheesh to fins and this guy used to be a common academic consensus was that no one would ever find body fossils in this kind of reddish brown mind brain rocks. i guess some academic opinion shouldn't be written in stone. of even. thomas marx and showed the consensus to be mistaken with the help of a bone he found as a young geologist at the bow marker quarry in 1974. we weren't actually looking for bones for execution it happened by coincidence one from the 1st i didn't recognize it as a bone i thought it was a part of the stone just by but then i repaired this white light thing and saw. as a

annmarie: did you see the permian price yesterday? $16.y are joking that you can get a ribeye steak that is more expensive than permian. we are in deep bear market in all of these companies. continental slashed today 55% of their spending. harold hamm is talking about the illegal dumping between saudi and russia. he's an oil capitalist. exxon, compared to everyone, that has this world of junk bonds, they were cut by s&p in this unprecedented time. in occidental today, they were cut by moody's to junk. out an emailed to employees talking about aggressive measures. she didn't exactly say it, but it sounded like she was alluding to some layoffs that are bound to happen. layoffs, if weee see companies going under, bankruptcies, etc., how quickly does shale bounce back from that? people keep telling me this is whack-a-mole. you see a company going under, that is probably the operating company going under. it's probably not the company it is holding. as a result of which, they go bankrupt, yet within weeks, these companies could potentially be b

alix: is that the permian? what is the intersection?ons footprint in everything we do. our oil emissions are coming down. methane emissions coming down. and then investing in renewables in support of our business and investing in breakthrough technology. we have a wide range of things we are spending money on. what is important is the people you have smart people challenge to find solutions to these big problems. there is no one company, there is no one industry, there is no one country that will find all the answers. we reach outside and collaborate with others. alix: that was part of my conversation with mike wirth, the chevron ceo. you can see more of that on "bloomberg: commodities edge." tomorrow at 1:00. at somegaining, we look of the trades in today's technically speaking. if you're heading out, tune into bloomberg radio heard across the u.s. on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪ alix: time for technically speaking. we set you up at some traits for the day. bill maloney, voice of bloombe

hanging out which means they're tacking and if russia gets on board -- because as kevin know the permianting to slow its production. >> i have been told by several people that, kevin, the entire oil space is overcapitalized is any of the oil -- where is there the investable place in the oil world right now? where is it? is there one >> well, you can find pockets of opportunity anywhere in any sector when it's down, but if you just count the btus sloshing around the world, the amount of energy sloshing around the world there is not a lot of good energy recommendations you could find at an oversupplied world and a slowing demand environment. ordinarily you would say the refiners profit when you have a low oil price, but that generally relies on a robust demand, discretionary demand in the western world taking up those vacations those trips those extra activities not so much hate to use the word coronavirus compatible as an investment thesis. >> a lot of these companies in the permian and elsewhere they bought a lot of money, how many are going to consolidate is the consolidation rate going

unfortunately the majority or farmers are illiterate so it's always difficult to explain to them how the permian asian and the poor natures i'm persons to have a good yield and also for for for a system so for the farmers we try to explain very easily and we don't really talk about probably nature is but when we talk about insect insects that visit the flowers the fab project is based in robot the capital the institute belongs to the international center for agricultural research in the dry areas or in canada houses a collection of sounds of insects found by the scientists during their field experiments many pollinators that exist in morocco have yet to be identified it's easy to get various species mixed up. sikes i can say it's 10 percent or 20 percent but i was asked i could not say this is an alter for a for example and say ok this is not true for those have discussion in that same discussion with our supervisor with people who are really specialists in this field and then we say ok this is this is the genius and this is the final decision because. stephanie crist months project has the back

been the stated goal of russia for many years, eliminate these shale producers, particularly in the permianant to make sure the market is working. we are focused on making sure the free market works, not on some government in front -- intervention that would go in front of the markets. amanda: how much can the industry due to reduce its cost footprint in order to weather the storms? mike: you have seen many producers just today talk about downsizing in response to the market. that is what we would really prefer, that producers and countries look to what the supply outlook is, what the supply needs are in the free market, not looking to government at this point to make up some of that demand. today thatouraged the department of energy decided they were not going to put another 12 million barrels on the market because of a sale from the strategic petroleum reserve. that was good news. we want to make sure our governments continue to make these kinds of decisions that are good for the oil industry. theor: thank you to american petroleum institute president and ceo mike sommers. much more next.

and i don't know how many more seasons i'll see i think the risk of a mass extinction as bad as the permian mass extinction is significant. bradbrook who has a ph d. in molecular biology quit her last job to work full time for x r the organization pacer 800 pounds a month to help cover her expenses. and although she's a founding member of the movement she doesn't consider herself a leader. leadership is something everybody needs to do next. you've got to have a need to ship perspective on your own life like what is it when you look at the whole thing so if you're in a group you're not just thinking about your own role in that group you're thinking about how well the groups go in and maybe at some time somebody who's better do not jump the man i can retire. to get. in the fight to save the climate bradbrook is also willing to resort to drastic measures on occasion last october she broke a window during a demonstration at the department for transport in london. but overall we know that civil disobedience is something that works in the world and it's necessary sometimes you kind of have to lif

consolidation in your patch over the next couple of months they were already saying way off in the permian basin because the producers are cutting their capital expenditures by anywhere between 30 and 50 percent and that means that the service providers to that was a while producers are not getting revenue windows are the ones who are seeing the bride to be were up by the crime right at the moment we're going to see your production go up to 3000000 barrels a day so a bit of a huge supply demand imbalance however i do think that we're going to see lower prices in the next few weeks and that's going to sag right saudi arabia and russia to come to south agreement to limit production perhaps go back to where they were in december 2019 in order to start placing some amount of stability to m w well market and of course that does not solve the situation until the pandemic passes and people go back to work would be much more weakly here not international trying to get there you can all say well keep yourself updated on all websites you can find that. the atlantic alliance the bedrock of the post w

markets will work for the weak are players in the permian basin.harles: 1.5 trillion in short-term lending so banks can do lending two between each other. 6 billion between march 13th, april 13th. that market erased half of their losses. christine lagarde took action today. wasn't wall street wanted but she pounded the table on the idea it has to be fiscal reaction. she said governments need to do the right thing and ours appears to be fiddling now. >> they said if you employ the right tool at the right job the right time the markets will respond. they only responded for ten minutes. they're back down again. the markets are looking for leadership. has got to come fiscally. this is biological problem. this is not a financial problem t didn't start in the financial markets. can't be solved in the financial markets. charles: bankers with mr. trump yesterday, this is not financial crisis. this is crisis of confidence. someone wrote a book about something like that. crisis of responsibility? >> sure. charles: we'll get you to come back, david. neila, st

consolidation in new york over the next couple of months they're already saying where you are in the permian basin because of the producer of the expenditures by anywhere between 30 and 30 percent and that in fact those service providers as well as all of our producers are not getting revenue when those are the ones who are seeing the brunt of the work both require and. right at the moment we're going to see your production go up to 3000000 barrels a day so a bit of a huge supply demand imbalance however i don't think bad we're going to feel the prices in the next few weeks and that's kind of sad right saudi arabia and russia compass out an agreement to limit production perhaps go back to where they were in december 2017 in order to start placing some amount of stability i'm sure you were a market of course that does not see the situation until the end passes and people go back to work maybe more snow we clear an hour to international time to get there you can all say well keep yourself updated on our website you can find that at r.t. dot com. a dark industry comes to life in los angeles eve

consolidation in new york over the next couple of months they were already saying way arse in the permian basin because the producers are cutting their capital expenditures by anywhere between 30 and 30 percent and that means that those service providers to those oil producers are not getting revenue windows are the ones who are seeing the bride to be were up by the cry right at the moment we're going to see oil production go up 3000000 barrels a day so huge supply demand imbalance however i do think that we're going to see where prices in the next few weeks are met going up for us so saudi arabia and russia countries agreement to limit production perhaps go back to where big were in december 2019 in order to start placing some amount of stability and do you well market of course that does not sour the situation until that passes and people go back to work. well the u.s. is now at the center of the pandemic with a large number of cases globally more than 123000 americans have tested positive for the virus more than 2200 have died new york state has been by far the worst hit with more than

we saw some companies pulling back in the permian. do you expect the trend to continue?more prices stay low, the more you will see pullbacks in capital spending, yeah. romaine: thanks. this is bloomberg. ♪ ♪ romaine: time now to look at what stories are trending. jeffries paid executives bonuses work's fall.e the bank's board has authorized $10.7 million in cash payouts to the ceo and his deputies and saying the collapse was completely unanticipated and dramatic. for theg.com, fighting right to repair farm equipment. this as other manufactures with thee industry data and software, making it farmers to fix the problem. hillary clinton is addressing the double standard of women presidential candidates. even though she did get the democratic nomination, she says there is still a double standard when it comes to winning running for president and was thrilled with this year's diverse field. you can follow all the stories online. approving a. senate $7.8 billion emergency spending bill to battle the coronavirus. mark warner's pork earlier with kevin cirilli on capitol hill. ta

top flight football including the permian has been suspended until the beginning of april after several players a manager has tested positive for corona virus or are in self isolation and in a continent which prides itself on being borderless some european union member states and now imposing tight restrictions on one another or introducing border checks all as in the case of the czech republic stopping power and travel together of course we all want to protect our citizens from the spread of life's so let's look together at how we can do that and how we can do it most effectively certain controls may be justified but general travel bans are not seen as being the most effective by the world health organization it's no surprise then that businesses are already taking a hit the airline british airways is one stop jobs will go as it prepares to deal with fewer people traveling attempting to put the brakes on this piracy it seems it's getting harder every day and he would al-jazeera meanwhile new zealand has just announced a mandatory 2 week orange anyone entering the country. we must go ha

consolidation and we're well over the next couple of months they were already saying where they are in the permian basin because the producers are cutting their capital expenditures by anywhere between 30 and 50 percent and that means that those service providers to those oil producers are not getting revenue windows are the ones who are seeing the brunt of the way up both the cry right at the moment and talking more generally about countries as a whole which ones would you say we hit hardest by this crisis which ones could perhaps write this out all all or all they all of them by some measure going to suffer pretty significantly by what's happening. well people will have their separate significantly but if you look at who the survivors are going to be of course and saudi arabia russia big crowd they are pretty rare cost of production but a poor look at the ever members of opec we're not an opec you can see a country right go rock is going to be under stress with a population that is already sick of the corruption of their government and revenues are going down places like nigeria or angola in wes

off depends on the earth's soil cob and sponge whether that sponge can have the perasso ity in the permian billet the to absorb that water and then feed it into the deepest sort of risings which are in so reservoirs because it's that water that governs life in the bot system. industry all formal farming before the i believe you'll soil the sole water. it just loses you. and your whole body complex soil on top of that which is there i let's say you have a heavy rain or any formal for space station you just leaf on the surface because the soil becomes here for the salt the soil spine which is leaving ousts and groundwater and char is leaving us because of that so we're just flushing the vital component of life away from ourselves. it comes down to impoverished soil that has lost its capacity to infiltrate and its ability to hold water. at the same time we drain and divert the water from its natural cycle. her. eyes the planet through industrial development in the soil horizon that was an important water reservoir is being sealed under concrete and infrastructure. thus they have enough except

north dakota there's only 6 producers that could actually still make a profit at this level in the permianonly a dozen can and this is from a few 100 shell producers that we're talking about and to give you an example like occidental they have their the one of the few that has their cause is below $30.00 a barrel but this by their low cost advantage their shells are crazy or shares are being currently traded $12.00 and that's about 65 percent down from previous years so even having such a low cost advantage it's not doing energy stocks any kind of favor so the more of the story is there is absolutely 0 good news happening right now for any energy company when oil prices are at this low and so we have this a little bit of time left but i did one just ask you this i mean visit oil price war that's happening right now with this it happened had we not had the coronavirus and this complete you know shutdown of the airspace space i mean it's not shut down legally it's just shutdown where people aren't flying anywhere with this so it still might have happened because we still had such a lower dem

runs off depends on the soil caverns sponged whether that spans can have the perasso city in the permian believe me to absorb that water and then feed it into the deepest sort of risings. in so reservoirs because it's that water that you haven't . life in the baathist. industry of formal farming before the ability of soil to hold water. it just loses me almost and you know very complex soil on top of that which is there i let's say you have a heavy rain or any form of frisbee station just sleeps on the surface because the soil will become cater for the fall the soil spine is leaving us and groundwater in charge he's leaving us because of that so we're just flushing the vital component of fly away from ourselves. it comes down to impoverished soil that has lost its capacity to infiltrate and its ability to hold water. at the same time we drain and divert the water from its natural cycle. we are been eyes the planet through industrial development and the soil horizon that was an important water reservoir is being sealed under concrete and infrastructure. if they haven't i think said so for

top flight football including the permian has been suspended until the beginning of april after several players a manager has tested positive for corona virus or are in self isolation and in a continent which prides itself on being borderless some european union member states and now imposing tight restrictions on one another introducing border checks all as in the case of the czech republic stopping power and travel together of course we all want to protect our citizens from this fed of bias so let's look together at how we can do that and how we can do it most effectively. certain controls may be justified. but generally travel bands are not seen as being the most affected by the world health organisation it's no surprise then that businesses are already taking a hit the airline british airways is one stop jobs will go as it prepares to deal with people travelling attempting to put the brakes on the spiers it seems is getting harder every day emma haywood al-jazeera well iran security forces will clear the streets of its major cities within the next 24 hours in a renewed effort to fig

basin and we think the permian will actually shrink this year.tore guiding this capital spending over $4 billion. be reduced that by $2 billion so think about it coming down by half. >> we believe it is not the coronavirus epidemic. the price is good go back to maybe $50 per barrel. >> this is the billion dollar question for many of us. sayink it is too early to how this will unfold. leading oil executives say oil sees its worst quarter ever and we are looking at that ramp up in saudi supply as well. thisrlier, we discussed with the president and ceo, scott sheffield. take a listen. we started with numbers. we thought they would be a supply and demand loss of 10 million barrels a day. that number is up to 20 and some analysts say it is high as 25. we agree with you but we need to get away from six dollar oil. the oil in delaware, from all the new wells coming on, getting six dollars per barrel. in the midland basin, $12 per barrel. something has to happen, and there are estimates that we will shut in 10 million barrels a day by ihs and that came

the permian is a new issue, the permian's producers are not as nearly as reckless as we make them out i'm more concerned -- david you and i are cross-purposes here, if we come in four weeks from now, the discussion might be different. >> in a good way >> no, in a public health way. >> that may be true. we'll discuss the virus every day for weeks to come most likely >> right >> perhaps some good news along the way. >> we do want to hear something. there's so many tests going on in china about things that could get people out of the hospital faster that's what i want that and the idea -- i want meg tirrell to come on and say there's been success to the gilead trial i don't want to come on and say i can't believe certain companies got trapped in oil >> right for now people are reviewing the banks that have the largest exposure to energy companies >> very true we did that before, did that in 2016 and the private equity companies, because the private equity is now the shadow bank, different from the shadow bank of 2007 and 2009 you know that world well you know the private equity companies

the permian from u.s. dollar assets is once again building. that is where your point comes in.could see something in the plumbing. we could see greater demand for dollar assets. i agree with you. i think you've got to watch the cross currency basis spreads here. sylvia: i think this is where global central banks come into play. that is essentially what will keep liquidity up. if have supporting repo markets, central banks supporting liquidity, that could keep the crisis at bay. but i think that will be a huge factor. some of the things that are also going on in the background, the factories are starting to open, so does that mean the goods in the supply chains and the essential any factoring network start to get back online, and we see consumer spending again and liquidity back in the market? i think it is slowly starting to show signs of that. gina: i think this is a really good point. everyone is focused on the fed might go 50 basis points. what about the balance sheet? that is probably much more meaningful. let's not forget they started to back away from this repo intrusion

the big permian basin in west texas. we have 10 million jobs linked to the energy sector right now.hink what is more important is what christine was talking about. the downturn in the market is pointing to a recession. 6 to 7 months down the road. exacerbated by the oil crash that we're seeing today. and don't forget about the coronavirus. you're seeing a drop in demand for oil and a price war. this will cause a lot of dislocation and the united states and put a lot of pressure on the middle east economies because they're very dependent on oil revenues and russia. it's resilient and will pay a price. >> sometimes you see one market move. sometimes you see an outsized move. we're seeing the oil market crashing and the stock market pausing. it feels a little dangerous here, doesn't it? >> it certainly does, christine. we were working together back in those days. 2000, it starts to feel like that bubble is bursting. we had automatic growth in the stock market. you could think it was a one way bet. same thing in the mortgage markets. the valuations were very high. dislocation in the sto

if you look at the permian prices, it is $16 and change. can buy a barrel of oil for cheaper than going out for a steak dinner. we see everyday, s&p, moody's, they are cutting these companies. there's going to be less spending. everyone says there's going to be consolidation in shale. the fact that the railroad commission, which is actually not railroads, but his oil and gas in texas, is saying that potentially come of this is what we should be doing, we should be cutting, is huge. taylor: what is consensus on any further downside risk from here? i keep hearing we could do $12 a barrel, and i also hear that this feels like a floor and there's not much further downside risk. what is it? annmarie: i think because you see a lot of statements about oil is going to be ramping up, but april is when it is physically going to be in the market. that's why everyone is saying this is just the beginning. you will see a downside to the price when we see those physical barrels of oil come onto shore. taylor: we thank bloomberg's annmarie hordern for stay

i was in the permian, it was extraordinary the boom we're seeing and this 50% correction from january 6th. 30% of that in the last three days of trading. little consolation, this rise we see today. the industry is going to be transformed by this price correction, no doubt about it. this is not about small and medium sized enterprises and the basins that produce the shale, but the majors have come in. the mature adults are at the table. they have deeper pockets, christine, but they're much more prudent with their spending. they have to cut back on production. not just about producing oil but making money and the benchmark on wall street is 15% return on capitol. they got clobbered during that selloff on wall street yesterday. >> the 1.5 million jobs in the u.s. is an important number especially if you see bankruptcies. is there a danger that the u.s.cache is collateral damage, the saudis try to grab control? >> reporter: i think it's the biggest worry for the united states oil and gas and the world. the department of energy said they don't like the fact that state actors are trying to

we'll see a shakeout in the permian basin and other shale territories in the united states as a result of this that we're seeing playing out in terms of politics, anna. >> john defterios. thank you. many thanks for your insight. >>> let's discuss all of this with vicky price. she's an economist and author and joins us from london. great to have you with us. as we know, the u.s. has passed a measure to free up billions of dollars. where does that money need to go first? >> so there's going to be lots of stricken companies. that's the first thing. they're going to have to survive this period. it may be short-lived, but we've been hearing for all sorts of calls, whether it's the airlines sector, hospitality sector, and also manufacturing. quite a lot of places in europe have shut down. even though china has begun to recover, there's huge issues of being able to sell goods abroad or souers components. so it's becoming a very important sort of blockage for anything going on right now. there will be some sectors doing well such as in europe where there's been panic buying and a lot of produc

.: it it is what we have seen with natural gas prices in the permian. physically needs to be handled, and the scale of the demand side downturn here is so epic that we are going to have a problem managing the oil, and as a result, you have to pay people to take away your production, at which point you would have negative prices for oil, yes. alix: is the risk that we hit storage capacity, or that we actually don't have the infrastructure and logistics to get all of the oil we have into some kind of storage, whether floating or on land? paul: that is part of it. firstly thatsk u.s. inventories do have space right now, but depending on how ,ast we fill, if we fill at say, 2 million barrels a day, the highest level we have ever seen, you are going to run out of capacity within a matter of months. at that point, we really do have an enormous problem, is suing that saudi keeps relentlessly pumping. you would have both problems that you refer to essentially. well doesn'til as shut down in the way you would think. for example, it is a big decision to shut down

no peak permian.chevron's ceo about his productivity plans, and whether m&a is in his future. i'm alix steel. welcome to bloomberg "commodities edge." 30 minutes focused on the companies, the physical assets, and the trading behind the hottest commodities with the smartest voices in the business.

you're talking about mymex, 20 -- permian again, 10 bucks.ou look on the screen, we could put up the prices. >> there it is >> that is for may and that's fine if you're looking for permian at 20 you're getting $10 for it which is why scott sheffield also on bloomberg this morning talking ten companies make it, 64 don't no consolidation because of the debt if you're buying one of the stocks today, remember that unless the government, if president trump calls president putin and they make a deal, even if they do that, there's still again no demand. it's a demand problem. keep coming back to the idea, we think our policymakers should do something. they can't create demand oil is still in the ground the prices you're seeing, west texas midland is $10 a barrel. that's the actual price for our oil companies, and nobody makes money there. nobody so we can look at those big posted numbers and you can buy the stocks all you want but in the end, david, occidental, it's not the old ok diessentialccidet conservative company. >> we discussed that many tim