show now -- u.s. shale now? chart, they did show about how u.s.ction may have bottomed in december. now we are seeing production rates up 125,000 barrels a day production each month. could the second coming of u.s. shale be more powerful of the first? >> i think it's important to look at what happens when prices - once prices reach the $50 mark. there was a significant increase in hedging and it was predominately by the u.s. shale producers, who went in and fixed prices at those levels. so, i do believe that production will grow and will grow stronger maybe then we anticipate. see priceswe coming closer to $50 and above. but i don't think we will see a wematic change the way saw more than 4 million barrels of oil production increase over three to four years. >> one man not interested in talking about oil is the former saudi oil minister. this is a man who, of course, can move oil prices and even currency with his words for over two decades. so, what's his focus now? we are joined by our reporter in singapore. in your city, what is on his mind? >>

we have u.s. shalexporting certain types of oil to asia they have never exported before. that puts more pressure on countries like saudi arabia at a time when they are already bearing the brunt of those production cut agreements. guy: fascinating stuff, tracy. thank you, tracy alloway joining us out of abu dhabi. still with us, manish singh. that is becoming increasingly clear that the saudi action demonstrates this perfectly, that shale will keep a lid on what is happening in the oil market. saudi changed its strategy and try to figure out how to make the price go up. the reaction to that is shale coming back. other areas are coming back onstream as well. there is a clear cap on the price of oil. >> that is true. oil is a critical issue for them. i don't see how oil prices are going to go up. we have supply waiting. we have gdp growth not accelerating. we have gdp growth of 3.7%. after that, it clear protectionism comes in that look will lead to further falling gdp. there comes a point, where i could o

the shale oil as you mentioned, the increase in production in the future of the u.s. to maintain a lid on the increase in prices. ofhink it is a period stability. we have a lid because of shale oil and a bottom because of the decision and willingness of opec to maintain prices at a reasonable price. both for producers and consumers. shery: do think the market is underestimating the revival of u.s. shale? can see that, it showed how u.s. oil production has bottomed in september. at we are seeing production 125,000 barrels a day production each month. the second coming, is a more powerful than the first? >> it is important to look at what happened once prices reached the $50 mark. there was a significant increase in hedging activity. it was predominately by the u.s. shale producers who went in and fixed prices at those levels. so i do believe that production will grow and will grow stronger than we anticipate. prices comingseek closer to $60 and above. but i do not think we will see a dramatic change, the way we saw more than 4 million barrels of oil production increase

we are seeing a second day of u.s. shale oil production coming to the markets. e are the two clear trends we see today in the markets. francine: have you been surprised by the pace of strength in shale producers? fatih: i wouldn't say so. we were the first ones which the first discussion on the help -- epidemic came on the market. and this may well give a boost to prices but don't forget this increases the prices which have an impact on the u.s. shale oil production and as we have predicted, u.s. shale oil production will increase at least 500,000 barrels per day from last december to next december and therefore will be very important for the producers, the others to take the u.s. shale oil production into consideration. top: mr. biroh, wonderful to have you with us. your energy outlook is gospel in counting the barrels. let me ask you a philosophical question and maybe you can help president trump as well. is america a nonopec nation? when you write up your acclaimed report, do you look at america as a nonopec nation or is it pog removed different? afatih: opec

what is the balance between opec and u.s. shale? y: i think opec said in the beginning that shale wouldn't rush back into the market. saying it would take those producers longer to ramp up production. what we've seen in the intervening two years since opec started this kind of battle to get back their market share, the shale producers reduced costs. so as oil came up marginally, and those costs came down, the shale producers were able to ramp up much more quickly and start hedging and kind of lock in some of those gains to get them back to the market. as you said we've seen again record u.s. production. record u.s. rig counts and record stockpiles. so the calculus there was that by bringing the price up in the immediate term but opec saying the deal is only going to last six months, they would keep the future price lower and that would induce people to take oil out of storage. tracey: right. all right. those were sort of the high level factors in the market right now. what is driving prices in the immediate past few days? because we

they will try to scare people into letting back on the production, and particular the u.s. shaleroducers, and that's what they've done over the past week. scarlet: is there a price level that the saudis are eyeing? >> i think they are trying to see where u.s. producers come back into the market and when they pump the brakes. i think we will see this over the next three-four weeks and see what happens to the u.s. rig count. that will give them a lot of information also probably around $50 is where they get a sense that u.s. production slows down below that, comes back on above that. oliver: on a macro scale, is there risk other countries will look to see what saudi arabia does? >> it's possible. don't think they would do something just based around what saudi arabia's doing it they are doing their part for sure. scarlet: how do you translate into actionable ideas? you are looking at midstream companies that would benefit whether you have a lower or higher price oil scenario. what opecredicated on does. we are under the assumption that opec continues to keep production down and may

prices within a fairly narrow range, say $50 to $60 per barrel, $50 usually considered breakeven for u.s. shalen, you kind of head toward a war of attrition with u.s. producers. you don't get that swift knock on u.s. production that a lot of people in opec had been hoping for. anna: tracy thank you very much,. tracy alloway joining us from dubai. our guest is still with us to talk about oil. it seems that the combined efforts of opec in one direction in the u.s. shale producers and the other have for some time been keeping the oil price down, but now we see the break to the downside. does that continue? >> it's back to the rate where they said they would reduce production. we could see oil in balance, and they have to lower the sulfur content, so it changes which oil is the right oil to use. at the same time, you are going to get a tall day of inventories later in the year. this could just be a blip. i think oil is well spotted in the mid 50's. we could see it spike next year. short-term i think it is just noise. this is a reaction to the increasing rip current in the u.s., but that takes a whi

the second trend that is also important in the oil market to note is the u.s. shales making a strong comeback, as we have foreseen a couple of quarters ago. believe,ing to see, we a major boom of u.s. oil production, and more portly, production in terms of the numbers -- u.s. shale production. tom keene: how fragile is a price decline? how likely are we to see a price break in oil? >> we see a significant chunk of the shale oil process -- project making sense, but if it goes lower, we may see production growth might be weaker, but there is also an upside. if the price goes to $70, $80, we might see shale oil production growth might be much stronger than we and others currently anticipate. >> does the oil industry you are in now have a future if the oil trade is to believe that we will be between $50 and $60 a barrel for a long time? >> actually. the whole industry has restructured for a lower price, and we just finished a deal with bp, what are taking over assets in the north sea, and those, clearly, also would run at lower prices and higher efficiencies. at abouteen

. >> he says there's no easy way to erase the trade surplus with the u.s., but he says imports of shale gas from america may help to hold it down. >> translator: as long as the u.s. economy stays on the recovery track, japanese exports to the country will keep growing to some extent. i think it's unlikely that japan's trade surplus with the u.s. will go down soon. japan began to import u.s. shale from january. if these imports grow, it could help curb the trade surplus. as president trump appears to be positive about exporting resources, shale gas could serve as a factor to balance bilateral trade. >> he doubts that will be enough to satisfy the trump administration. he says the u.s. will likely demand japan open the door to more beef and other foreign produce. >> translator: the united states and australia are competitors in exporting beef to japan. japan imposes a 30.5% tariff on australian beef imports. in accord danance with the bilal economic agreement. i think it's highly likely the united states will demand that japan lower its tariff for its beef as well. >> that's the latest in

they met with u.s. shale counterparts.in their words fairly constructive and continued dialogue. the broad agreement we all know is that an oversupply is not positive for both parties. the question is when it comes to whole tangle between opec, non-opec, and u.s. shale, who blinks first. oil $48 is the most active contract. let me wrap things up with a look at south korea. this tracks inflows and outflows net on a weekly basis and goes back to march last year. first time since the summer that we saw these inflows last week, topping $1 billion. perhaps now the uncertainty as far as the former president is concerned, does this mean foreign funds come in and a big way and start to play? a few weekshappen before that, $1 billion, the biggest inflows into south korean stocks going back to the summer, july 20 16, reason perhaps also the south korean won is the best-performing currency across asia year to date, so very interesting as we get into what is certainly a big week. >> thank you. let's get first word news with min from a

the second trend that is also important to note is the u.s. shaleking a strong comeback, as we have foreseen a couple of quarters ago. we are going to see, we believe, a major boom of u.s. oil production, and more importantly perhaps in terms of the numbers, u.s. shale production. tom keene: how fragile is a price decline? how likely are we to see a price break in oil? >> if $50 price we have today, we see a significant chunk of the shale oil projects makes perfect sense. if it goes lower, we may see if the production growth be weaker. may but, there is also an upside to this story. if the price goes to $70, $80, we may now see shale oil production growth may be much stronger than we and others currently anticipate. >> does the bit of the oil industry you are in right now have a future if the oil trade is to believe that we will be between $50 and $60 a barrel for a very long time? >> absolutely. i think the whole industry has kind of restructured for a lower for lower longer type of price, , and we just finished a deal with bp where we are taking o

long-term demand for oil will grow in you will need u.s. shaleand in the market is not factoring that entered alix: what is your favorite investment? >> what happened from u.s. show perspective is it became one of -- lows cost basis. it can peace with a lot of other opec countries. it is going to be growing cash flow for years to come. it is a great way to play in oil producer. alix: you said you need $65 to incentivize production. pioneers break even that is under $40. >> the u.s. has become the base production globally. so, the low cost guys win. ..s. shale is winning the losers all the non-opec producers. shale wins and everyone loses share. alix: does that mean more m&a consolidation? we're supposed to get the big m&a. does that continue? >> probably does. we have to get back to a more growth-oriented environment before the big guys feel the heat consolidates. the shareholders are telling them returns and dividends. as prices improve, it will be growth and growth will have to come from acquisitions. jonathan: i want to talk about opec in this

secondly, the u.s. shale gas producers are very active, significantly ramping up their output. , we have seen great uncertainty surrounding the new u.s. government. we are still watching the market. i'm afraid it is not a start -- smart move to start now. >> you are planning to 868 aircraft.an on new how many planes does that translate into and what will it makes me between airbus and boeing? in the next three years, our plan is to buy 155 new planes. getting 56 are planes, 44 in 2018 and 55 in 2019. all of these orders have been placed and confirmed, and of those new planes, boeing and airbus will supply half and half. we always make it balance. >> how are you towards increasing your routes this year is to mark where will you be adding new roots? which regions at how many more can we expect to be added in 2017? >> we plan to increase our investment in european markets. for instance, we are to offer two new routes to europe. shanghai, barcelona will be launched on may 5. later, we will launch basing zurich. we expect to see good results on both as they are mainly to meet the dem

when business u.s. shale, we're back near all time highs. we're 9.5 billion barrels a day. the shale, the delta, where all the growth is coming from. to say the market can flood rest of the world. >> why wouldn't russia have been on board? russia has a vested interest. the russian economy depends on it. >> you're telling never u.s. can blow out the entire oil market for the world. alone by their production. >> i think the saudis have potential to blow it out. of course. when you look at the deregulation, there will be drilling, fracking, digging, anything. >> opec has controlled the oil market forever. as far as i'm concerned they are obviously trying to hold market share. that was what was going on. now they're trying to hold prices. they're a disaster if they change on that policy right in mid stream. we expected the u.s. to come back. >> here's what i want to know. after a week in which energy stocks were the worst performing sector in the world and, after this big decline in oil, are you a buy? >> no. i don't think they're a buy. if you want the dividend. we might be dow

is and how quickly u.s. shaleupply can come back to the market and i'm also quite concerned about what's happening in places such hinahich we've had a massive debt boom in china which is what has led to this big surge in commodity prices over the last year but that's showing signs of cooling now so i wouldn't take the dollar to sort of mean that commodity prices are going higher. i think those correlations have broken down in the last six to nine months. >> well, we'll see the synchronous global upturn would be good news. ruchir sharma, stephen wood, thank you for joining us. >>> samsung slapping a new face on its troubled galaxy 7 smartphones. but first, check out shares of red hat on pace for its best day of march, 2015, yesterday hitting fresh 52-week highs. "squawk alley" will be back in a moment. >>> president trump leading a listening session this hour with the fraternal order of police. this is the president with the fraternal order of police, a meeting this morning just taking place there. he's sitting dow

. >> and you are not concerned about the rebound we are seeing in the u.s. shale. inventories might come down, but then production may come back on line in the united states even more than it is now. >> i have always said that tting 1.million barrels -- 1.8 million barrels per day, if you calculated with regard to an increase of about 1.5 million barrels daily this year -- 017, subsubtract ubtract that and about 500,000 increase in non-decoration countries, i think we are on the way of consuming that excess in storage. >> where do you see prices going in 2017? what range do you expect them to land in or to move in? > the prices are averaging $45 in 2017. 50's veraged in the lower in 2016, and i think if we can tain $50 to $55 throughout 2017, i think we will be in good position. >> of course russia was leading the charge from the non-opec front. was 100% ance level for opec, and 64% for non-opec. they are going to get this up soon. do you extend this agreement? i sat down in a conversation with alexander novak. here is what he had to say. >> we have discussed such

--re in mind, we believe bear in mind that we believe that the u.s. shaleis growing month after month. weeks the for a few oil from libya is not quite hurt too much. mark: what is the point for shall right now? a year ago, you could have asked executives what is your breakeven price for shale. they would have said six dollars or $70. now, they are saying lower. mark: it says the oil price could go lower. >> yes, i think we see the oil price going lower. compliance. everyone seemed to be clapping their hands. the longer this deal goes on, the more difficult. and how long can opec and non-opec stay compliant? >> the question is how long saudi arabia is willing to carry along with this compliance. for now, it looks fantastic. we have 100% compliance because the saudis are capping a lot. as far as initial compliance, forward. have broke they are not actual cuts. i think the difficult bit comes in the second half of the year when you get not the help of -- in the summer, typically activity increases. it will be difficult for russia to comply. , thank you for joi

you can see the yellow line, the drawdown in production from opec, not really stopping u.s. shalet's bring in a senior research manager with wood mackenzie to talk about this. u.s. stockpiles at records, prices below $50 a barrel, is opec left with no choice but to prolong the cuts? opec, theve with production cuts, with a meet in may at the ministerial meeting, we will have -- we had a meeting yesterday, there were two things, one, strong levels of compliance with production cuts from december 2016 presidential levels. -- production levels. the committee is willing to the very -- to deliberate to roll over the production for other six months than the meeting in may 2017. we strongly believe that they will meet to roll over production cuts in six months without that. we see a significant stock bend into -- in qe and q4. yvonne: what does this mean for prices if we continue to see the prospect of further cuts in the second half? well below 50 right now. if we start to break through 60? pricewe look at the oil for the supply story, we see demand fundamentals remaining. we see oil de

yousef: you're not concerned about the rebound in u.s. shale?nventory may come down but the production may come back online even more than it is now. that cuttinge said 1.8 million barrels per day -- if you calculated with that cutg 1.8 million regard to an increase of about 1.5 million daily, per day summit and increase in 2017, subtract from that about 500,000 our expectation of an increase in countries, non-opec i think we are on the way of consuming that access in storage. yousef: where do you see prices going in 2017? what range do you expect them to move in? >> prices were averaging around $45 in 2015. they averaged lower 50's in 2016. and i think if we can retain $50-50 five dollars throughout 2000 and 17, i think we will be in good position. yousef: russia once to lead the charge from the non-opec french. 64% for non-opec. no one is worried here. they are convinced they will get this up very soon. the other question becomes --do you extend the agreement? i sat down with alexander novak. here is what he had to say. possibility and i would

we see oil prices rise, we get u.s. shaleion coming back on stream and we see supplies rise once again until the market catches wind of the supply increase. then we see prices fall again. it seems we are in this vicious circle right now. of course the oil story has been front and center of the latest discussions in kuwait city. ony said time is not really opec's side. the longer this drags on the more likely you're are going to have unintended consequences in the united states with bill in inventory. it is all coming back. we will see what they come up with in the conversations. that brings up the discussion around fiscal breakeven points and how it affects this part of the world. there is no way to sugarcoat this. far far away. that is how far we are from the breakeven prices for gcc countries. close to $100 a barrel. is still not anywhere near the current level of oil prices we are seeing on brent and wti. faison, as you look to what is you look at the local story here in kuwait. look at the kuwaiti stock exchange. best-per

he said there is too much volatility in the markets and pointed to what is happening with u.s. shaleon. , theyms of the renminbi have reduced their dollar denominated debt from 70% to 49%. the target is 35% and say they are making progress on that. in terms of revenues, regionally, they have seen an improvement in u.s. and asia, weakness in europe and of it expects european china revenue streams will improve in 2017, hence the partnership with lufthansa, that kicks off on the first of april and say they may also consider further code sharing deals with other international airlines. for now, no plans to buy additional stakes, but we will have more on this interview with the cfo from air china coming up. haidi: can't wait to see the rest of that chat you have there. tom mackenzie, our china correspondent. winning over the world, why chinese stocks have had a strong start, and why h-shares of the place to be. this is bloomberg. ♪ haidi: a quick check of the latest business flash headlines. the chinese smartphone maker once compared with apple is growing and says global revenue should to

control does opec have over the old price right now given that we have seen this massive rebound in u.s. shalen? >> they are targeting inventories that are held in the developing countries and a lot of that shale is going to be going into storage if it cannot line market. a big factor they do not control is the shale and the big prize improvement as this companies had to that production, they're going to raise it up and get more barrels on the market. tracey: let's stay with saudi because of the country's energy minister -- energy says the supply may be extended. that hel-falih told thinks markets are not confident of the outlook. >> our objective of doing what we do -- saudi arabia is driven , encouraging investment flows, making sure the global inventories that have been in a glut situation are back to where we should be in terms of long-term averages. that is where i have my eyes focused on and it looks like it is something that can be easily managed. we have many variables at play here and we are on course. i think the fundamentals have significantly improved over the last few months. pric

if you listen to what he just told us, a lot of u.s. shaleentory and prices are down, there's a good chance that that opec production cut deal could be extended because we don't have any of the three things that he just mentioned. back to you. >> thank you. right when this interview was going, wti hit session lows. we'll get more on that intra-day move in a few moments. >>> next, the good, the bad and the ugly. >> and what happened if all the women stopped working and shopping even for just one day? a worldwide movement to make that happen next on "power lunch." had a bad back injury, my doctor prescribed opioids which helped with the chronic pain, but backed me up big-time. tried prunes, laxatives, still constipated... had to talk to my doctor. she said, "how long you been holding this in?" (laughs) that was my movantik moment. my doctor told me that movantik is specifically designed for oic and can help you go more often. don't take movantik if you have a bowel blockage or a history of them. movantik may cause serious side effects, includin

. >> you are not concerned about the rebound in u.s. shale?nventories might come down, but it might come back online in the united states more than it is now. >> i've always said that cutting , ifmillion barrels per day you calculated with regard to an increase of about 1.5 million ,arrels per day in 2017 subtract that from the amount, expectation of an increase of supply for non-opec countries, i think we are on the way of consuming that excess in storage. >> where do you see prices going in 2017? what range do you expect them to land? averaging $45were in 2015. they were in the lower $50 in 2016. $50 to if we can retain $55 in 2017, we will be good. yousef: let's see how it affected sentiment across the middle east, it definitely dampened some of the initial momentum we saw late last week. you can see it was a mixed picture across the board. none of the regulatory changes really reflected any sense of euphoria. you are looking at a change in the cycle and saudi arabia. look at dubai. stocks driven lower after news of the deal. abu dhabi drag

harold hamm, the u.s. shale billionaire said the industry could kill the crude market if it has another spending binge. oil is down below $50 per barrel. we have a couple of earnings lingering to talk about. signet jewelers limited bouncing and the stock has been battered lately by a number of different issues. the company says it will be closing locations in malls and opening in other locations. butad reduced its forecast the earnings came in above estimates and staples is also closing stores, about 70 of them in north america. comparable said store sales in north america fell by 7%. and oil,f stocks treasuries still continue this yields are up 21 basis points over the past couple of weeks and now the ninth straight session. at the 10e a look year yield versus the s&p 500 seeings yield, we are essentially that treasuries are looking cheap versus stocks on that particular basis. mark: we are off of the highs of the day after a less dovish mario draghi held court. this is an intraday stoxx 600 chart which is when

turning to oil and the outlook for u.s. shale producers, alix steel is in the crescent city.g us and inclusive -- an exclusive interview with the president and ceo of continental resources. if you want to know what thinks, this is the place to be. , what is then d.c. number one thing continental wants to see rollback? mr. stark: i think what i can say is president trump is doing a great job of rolling back the regulations and basically improving the environment for companies like continental and others in this industry to take care of business. have a hard time swearing is that shale producers when gangbusters under president obama, so what was so burdensome for you that you feel like you have better clarity on in the next four years that will help you? mr. stark: i view it differently. i say we actually thrived in the obama administration really in spite of the obama administration. were continuing to build on us. to the point where we had to build regulatory departments that had to expand to try to keep up with the overreach that we were experiencing from the regulatory sid

certainly the growth in u.s. shaled by some terme low cost, quite buoyancy basins, like permian basin. i suppose that being extended to the rest of the industry, there is a question mark over, and we are expecting to see production cuts, costs start to rise again as evidence of that image. while we are seeing drilling increase, most of that has been based upon sentiment and the output that producers expect to see in the second half of the year. they will certainly see pressures over the medium-term whether they can sustain that. betty: speaking about undermining, not just the u.s. but russia which keeps producing more and more oil. i want to show viewers of the only line they need to pay attention to on this chart, the g #btv 7406 chart, the white line, which shows you russia crude oil output. that line almost just really within the last six months or so has been a straight line up. how much is that going to change the effect of the opec cuts? >> it is undermining it to a degree, that is where the market is getting con

we know they hate the u.s. shale industry. will they relent if they cannot get above 50?hey might give up and go for the revenue. they will wait until aramco comes public. they have got a giant bond offering to get off. they will get those bonds placed. then, we will see what the saudis and opec are going to do. it is soon to take a commitment there, because it is a policy statement. vonnie: brian battle for our futures in focus segment. vonnie: the senate intelligence committee is holding a hearing on russian interference in the u.s. election. today's hearing about techniques russia uses to spread disinformation. a couple of witnesses. a former national intelligence officer for russia and eurasia. and a georgetown analyst. there, you have mr. warner, a senator. you can watch that live on your bloomberg. this is bloomberg. ♪ nejra: this is "bloomberg markets." i am nejra cehic. vonnie quinn. time for a look at the biggest business stories in the news now. saudi aramco has chosen j.p. morgan, morgan stanley, and hsbc 40 roles in what could be the biggest ipo ever. as banks

we can start to find they're going to ramp up production to compete with the u.s. shale. would not be surprised if the oil at $40 by the end of the air if not sooner. mark: bill, great to see you all to see you., great today, futures in focus. vonnie: pretty amazing call. time for our latest bloomberg business flash. some of the most interesting stories in the news right now. banker tryvestment to boost income from existing clients according to people familiar with the move. the banks surveyed customers than told executives it was too cumbersome to deal with and has frustrating technology. -- 70%.reduced its slightlyas his pay cut to 13 point finally and dollars. $13.5 million. greece main opposition party warning the premise to elect, we won't be bailing out your government. demanding more austerity measures. seeking support. we spoke with the party leader. measuresl the fiscal of the cost that greece has to pay for their incompetence of this government. tspiris has as solid majority in parliament so it is up to him to deliver the votes. that is your bloomberg business f

at the current macro settings, if you will, stronger dollar, this whole tangle between opec and u.s. shalers. have we peaked at $55? betty: thank you so much. we will certainly be watching the price of crude very closely. the final piece of the fed rate hike puzzle falls into place hours from now as the u.s. releases of february jobs report that is expected to show a labor market that is picking up steam. we got that indication from the adp report. kathleen hays joins us with more. probably not quite as strong as the adp employment report suggested. there was a net gain of workers in the private industry, which of course is the vast majority, everything but government jobs. u.s. payrolls, by contrast, are seen rising by 200,000 in february. as you can see from this chart, that's a very respectable number , not as strong as january, but the six month moving average is 183,000. it is well above that. other signs of strength -- for example, average hourly earnings, that is a measure of paychecks. that is supposed to rise 2.7 percent year-over-year from 2.5% in january. the unemployment rate f

on the other hand, rising production in u.s. shale. which of these two factors will be the biggest driver for oil going forward? . it's difficult for opec. they're heading into the may 25th meeting, they will be looking at themselves handing shares to the u.s. it will be difficult. some of those earlier comments suggested or highlighted that we are seeing increasing efficiency coming out of the u.s. we're not seeing that cost inflation that many expected that could weigh on u.s. production. >> we had comments overnight from the russians and iraqis talking about whether this agreement might be extended. they say it is too early to say. it is set to expire at the end of may. do you think there's enough to extend it? secondly, will it make a difference in the face of rising production in the u.s.? >> if they want to sustain oil prices, they may need to make further cuts. but there's a clear difficulty in trying to ensure that non-opec members that joined in with the cuts complied. there are remarks from russia saying 50% of their cuts. wh

the company said it will double production of u.s. shale by -- in the next ten years. >> they have good assets. not great but good. $47 billion in projects going on right now in that particular area. a lot of it related to lng. a lot related to the fact our natural gas prices are the lowest in the world now. you can build a lot of plastic. it is a boom. i wish more people could get down there. sometimes i think wherever there is unemployed people, we should give them a federal bus ticket to get there. if you can add medicalewelders, have a shortage of in this country, people working with their hands to get this all done. the jobs that are coming in texas, east texas, are rather extraordinary. if i were president, i'd get down there right now and say, look, this is where you have to come. this is where the jobs are. >> a lot of jobs left north dakota, which boomed for a very long time, didn't it in. >> yeah but these are more -- absolutely, the pri-- >> you break even and we move below it, we know what happens. stop talking about man camps.

oil production, and more importantly , u.s. shale production.ning us now is stewart wallace. does any opec cut or any extension dent this recovery? >> i think what the market is looking at now is to what extent opec and non-opec are prepared to carry this deal through in may. when they went into the deal, they said we will do it six months and that will be enough to rebalance reserves. that has not happened. there is a difference between compliance and barrels on the water. the net effect is that the supply to the global market is not dropping as much as expected. production and inventories continue to rise in the u.s.. that is not a great scenario for opec and non-opec going into this meeting in may. alix: if you are a u.s. producer, you hedge this production. aay resources is 100% head this year. can inventories fall fast enough to offset that from u.s. shale producers? months,e next couple of we will see inventories in the producing countries themselves. saudi arabia increase production in genuine we think to refill domestic inventories that

than there was a year ago. ,il has been so volatile between what opec is going to do, how fast u.s. shaleare going to go up production, it is hard to say. joe: big picture. u.s. production and inventories are climbing back out and that is keeping a lid on prices. , all oft out, if they these producers and drillers are at the mercy of banks does it stand to reason banks can determine the global price? >> banks have a big say in this. no doubt about it. these credit lines are the lifeblood of what runs through their companies now. it's not the only source. there's not a lot of equity issues. this is going to be a big determinant to how fast the sector can grow. scarlet: you have the empty companies, you have drillers. financially which are any better physicians? -- physicians? >> the drillers are doing the best. we see an enormous amount of growth. they are bullish on their prospects. oil service companies are still struggling. they cut their fees back last year to keep business. they had hoped to see increases this year as production ramped up. the drillers are still resisting. we will see

that is what hamm is referring to here, this lack of discipline within the u.s. shaledustry. you could see supply continue to be big, production cont to ramp up,and continue to pressure oil prices. finally, i mentioned the technical levels we are watching. abigail knows more about this stuff than i do, but even i can see we are falling below many of the technical momentum indicators that traders tend to watch. the 50-day moving average on this one in particular as well is the 200-8 moving average. the 100-day moving average, also fell below that level. we are seeing the 200-day, oil kissing that level now. we will see if it ends up bouncing off of it or continues to head lower. david: julie, thanks so much. j.p. morgan chase chairman and ceo jamie dimon says president trump will get at least part of his agenda done. he said that in an exclusive interview today with my colleague francine lacqua at the global markets conference in paris. francene asked him if he is confused about what the trump administers and is going to do for the economy. jamie: there is what is posit

u.s. exxon also going to commit over $5 billion to developing the balkan base. you've had a challenging time with your shaleught a few years back. what's your plan? eldar: our plan is to continue to improve our free place in the u.s. so we are in marcellus and the balkan and have a high quality operation and we'll continue to improve that and continue to look for opportunities to expand and develop that business going forward. alix: the real profitability is in scoop stack in oklahoma and in texas. would you be willing to put in money at these prices to get access to those areas? eldar: we've come to the conclusion now we're here to stay. we have a very solid business. we're continuing to improve and have an organization and a structure where we can vote on resources but it has to be the right kind of resources at the right price so we will look for those kind of opportunities. alix: you think permian is overvalued now? eldar: it looks definitely fully value sod that's the perspective we'll have to bring along as we it opportunities. alix: same thing in oklahoma? sam was with us a few weeks back and had bou

what opec are finding out is squeezethe idea was to out the new producers in u.s. shale so the price could rise, it has not gone well on the back of the prices. i think they are in a difficult position now. choice but to go again in terms of limiting output to try to get the price blue line onhat your chart can't keep on going up. matt: u.s. crude supplies continue to rise. that doesn't help opec's gambit at all. how does this affect the inflation outlook? it is kind of a dud. after we saw inflation over 2% in europe, the headline number, it has come back down and the core isn't really moving. kit: everything in the inflation data comes back to the wage growth numbers which aren't picking up either. if the only driver of global inflation, even at a point near full employment, where the output gap is very small, if the only inflation i get is a brief jump on the back of what oil prices are doing or some other commodity prices are doing, that is not fundamental, real, underlying inflation. matt: and central bankers will continue to look through that. that was kind of the p

joe: let's talk about u.s. shale. hopes of the saudis was that it would crush the shale industry.seem to have happened. economics of the industry right here basically a $50 a barrel? tina: if you look at the chart that was put into earlier, it is isically talking about -- it fantastically economical to produce oil. if you are a rigged owner, if you are someone looking for oil or produce oil, most of that rate increase has been there. it is forced the industry to revert to the most profitable place they can find. scarlet: they had managed to do it much more efficiently. they can get up the rigs than pump gas oil much more quickly than in the past. tina: in with the shale revolution it is not quite such a no deal anymore to get wells bring to reignite, or to production online because basically you're not having to drill five miles beneath the ocean to get to the oil. he basically deceptive find the shale, figure out what the formulation is to move it out and get a producing. you mentioned earlier traders being board of the range. but traders themselves are very long oil. as of recen

what we are seeing from the u.s. shale producers, keeping a rise in oil prices. porter: that is what has been the pricing for everyone, the speed at which it came back. there is a moment when you had the u.s. government predicting they could reach $1h 10 billion. barrels a day that is more than saudi arabia is producing. opec was trying to kill the shale industry. it has not happened. they are all meeting in houston and everyone is asking, are you going to extend this deal? you have to be happy with prices in the $50 to $60 range. and they have not been explicit about it. now they need to start making positive noises about what they will do when the current six month deal ends. manus: let's go back to two weeks ago, national petroleum week. we had a panel with the qatar oil minister. the qatar minister was trying to push that story of near 100% compliant. what shifted in two weeks? >> they are being incredibly compliant, but it is not enough. that is what has changed. based on the old assumptions about u.s. production and everything else, that was enough. but then

secondly, the u.s. shale gas producers are very perp -- productive. seen great uncertainty surrounding the new u.s. government. spacex has flown a reused rocket to space and back again for the first time, marking its attempts to reduce costs, allowing people to live on other planets one-day. placed a, a rocket satellite into orbit and landed on a drone ship in the atlantic ocean. it was 15 years in the making for elon musk, who has the eventual goal of colonizing mars. that is your business flash. guy: thank you very much, juliette. a story seems to suggest the brexit guide seeks progress in terms of the exit negotiations before trade talks start. that means we are neither in a situation where it is parallel or sequential. is happeninghat here. i.e., there will probably be a start on the divorce and if the divorce is going well, we can start talking about trade, i.e. one does not necessarily have to follow on from the other sequentially. there is some fudge halfway in the middle. interesting to see where the bill fits into that process, i.e. if there

it's all about u.s. shale production. it's about fracking, it is about something that is never going to reverse itself and change, scott. there's a tremendous amount of domestic oil here. non-opec production is really not in compliance right now. we're not surprised by this at all. and it was telegraphed at the beginning of the year in the energy equity markets. does it bleed through and impact equities, themselves? yes, it does, if you get below $40. but i think in the 40s, we're okay. >> boy, steve, we were just talking not that long ago, wondering if it was go maybe to 60. the head of saudi aramco over in houston with brian sullivan this week saying that the worst was over. i asked you yesterday, point-blank, if oil does drop below 50, do we have a problem for stocks. now that it has, what do you say? >> no. and i'll tell you why. if you recall back to when oil was dropping, the big concerns were that it's partly economically driven. that there's less demand because the economy is shrinking, not growing. here we are in

increased apply from u.s. shale producers. that is all setting events.et is louche global economy doing well. the third piece of the puzzle that is bearish is the oil inventories which are at skyhigh levels. demandifficult for even being better than supply to feed through two substantially higher prices. in terms of the outlook for inflation, we did some calculations. oil staying at the current level means for the next three to six months we are likely seeing some of those jumps in headline inflation. what that means is we could get headline inflation in places like the euro zone the u.s., japan, moving back toward core inflation. in the u.s., this is not really a threat to the reflation fee. core inflation is moving higher. in europe it could be more of a threat because core inflation move tire but it is still really at quite low levels, a long way below the ecb target. that could mean investors and start to look at inflation and the u.s. differently from inflation in the eurozone. anna: that is the inflation picture. if you look at the emerging markets

. >> there is basically a price war going on between the u.s. shaled opec and opec cut back on their production and the shale producers are finding financing for them to go forward and so you're going to continue to see this tug of war. i don't think the glut that you see in supply is because the global economy is slowing. >> charlie, this is exactly right. plenty of people could say oil proxy for demand, it's going south. that's not a good sign. it's hard to deny the evidence piling up everywhere that there is an unbelievable amount of supply in this market. >> that is true and i think that's going to be the one offset to a bigger trend, which is inflation. lower energy prices are going to moderate inflation, but i think the big story today was that 2.8% increase in wages from a year ago. we are finally starting to get really hard to deny evidence of inflation. we've got much tighter job market, we've got drug prices up 7, 8%. we've got rental prices up 4, 5%. you're going to have tariffs on the borders. we've got a lot of things that are pushing tow

there a scenario where opec is kind of shot itself in the collective foot because they forced the u.s. shalers to become so doggone efficient that we're just going to keep pumping more oil? >> i think there's a real risk of that and one of the things we've been telling our investors throughout the year the biggest risk for crude this year is the prospect of a market share war or at least showdown between opec producers and the u.s. producers because what opec has shown is that it clearly cannot stomach $40 to $50 oil whereas u.s. producers have gotten more efficient and retooled our cost structure and become cheaper and more efficient and we can now make really good money in the core plays in the u.s. at $40 to $50 oil and unclear how opec is going to work with that and resolve those issues. >> well, we'll see if they can, kate. we heard at the conference last week that iraq wants to go by 5 million by the second half of the year. the other nations, if they go 5 million, i'm not getting screwed over and we have way too much oil. is that what you think will happen. continued supply glut and s

one third of two thirds will go to u.s. shale or. is -- four. --? has an budget so you have to keep that in context. they are certainly making a strong move into shale. the question is how do they do it? the deal was a privately negotiated deal with a private group, not a public company, but i think with continued will be morethere and more m&a and more and more big companies looking, although valuation will remain an issue, and we will continue to see substantial equity issuance. i have been in this business for three decades, and we have by far the largest ibm -- ipo backlog ever. aix: we will get to ipos and second, i want to ask about valuation. exxon went into the permian and valuations are sky high. they are valued at 82 times even. -- ebitda. where do we see those deals in the u.s. and that what kind of price? osmar: i think we will continue to see deals that value will remain an issue. if the permian continues on the path it is in terms of valuation i think you will see people looking in other places as well. a number of the company's and th

much confidence here that necessarily it will go through, or that it will help that much because u.s. shaleion is going higher. you can see the april price is around 47.50 at the close today we will roll over to may, that's around $48, but still sitting under that $50 point. this market appears to see some pressure going lower. back to you. >> thank you, jackie. >>> soup may be good food, but apparently it is no the a good investment. campbell's soup and general mills and kelloggs downgraded by bernstein research. to sell. remember loyal viewer last week i was wondering whether there were more sell ratings on wall street because it seemed like there was. eric chemmy joining us with a special segment he tells melissa i was right. >> melissa, what could be better than that. >> brian was right. want to get that off the top. maybe my segment is done. >> thank you, eric. see you later. >> i will use that as my check please. >> going to be brian was right. >> but it's not just food. right. you mentioned food today. not just food. across the entire s&p 500 we're looking at an increase in selling a