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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the Radio plus mobile last and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: This updates brought to you by National Realty Returns on

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Speaker 1: cash and rented real estate fund them at n r

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Speaker 1: I A dot net u s stocks higher, headed toward

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Speaker 1: an eighth year of a bull run, led by a

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Speaker 1: rebound and energy shares amid speculations central banks will continue

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Speaker 1: to provide stimulus to bolster sluggish global growth. We check

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Speaker 1: the market severy fifteen minutes throughout the trading day on

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Speaker 1: Bloomberg SNP five hundred, up three tenths per cent or

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Speaker 1: six points in five down. Jones Industrial average at four

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Speaker 1: tenths per cent or sixty two points to seventeen thousand,

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Speaker 1: twenty six. The NASDAC is little changed, up three points

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Speaker 1: to forty six fifty one. Ten year Treasury down ten

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Speaker 1: thirty seconds, the yield one point eight six percent. The

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Speaker 1: yield on the two year point eight nine percent. Nimex

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Speaker 1: screwed oil up one point six percent or fifty seven cents,

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Speaker 1: to thirty seven oh seven. A barrel comes goal down

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Speaker 1: one point four percent or seventeen dollars thirty cents to

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Speaker 1: ounce the euro at all oh nine five one the

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Speaker 1: N one twelve point eight nine Valion Pharmaceuticals International well

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Speaker 1: had three new board members, including a representative from one

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Speaker 1: of the drugmaker's biggest investors, and expand the panel to

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Speaker 1: fourteen directors from twelve. Also BMW predicting only a slight

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Speaker 1: increase in deliveries, taking a cautious approach for a year

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Speaker 1: when it risked losing its lead in the luxury car

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Speaker 1: market to Mercedes Benz. That's a Bloomberg business flash. Tom

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Speaker 1: and Mike Karen Mousca, thank you very much. Stephen Shark

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Speaker 1: of the Short Report is with us. We're talking about

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Speaker 1: the price of energy. We talked a little bit about

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Speaker 1: natural gas and how it was a mild winter didn't

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Speaker 1: help the price of natural gas. To what extent, Stephen,

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Speaker 1: is oil correlated with the weather. It's correlated to the

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Speaker 1: sense from the point of of course the slipped fuels

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Speaker 1: and the products so gasoline and so forth. So for instance,

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Speaker 1: as you pointed out, we had a very mild uh

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Speaker 1: summer excuse me, winter, so that meant in the northern

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Speaker 1: latitudes you didn't have snow, you didn't have ice, so

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Speaker 1: you didn't have the normal weather demand destruction. So again

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Speaker 1: the weather is going to play a difference, certainly in

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Speaker 1: the winter, depending on the road conditions. So the road

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Speaker 1: conditions for the most part were very favorable to strong

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Speaker 1: gasoline demand. And indeed this is this is exactly what

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Speaker 1: we saw and so that's also going to impact at

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Speaker 1: this point right now in the Midwest because we're starting

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Speaker 1: to enter the planting season, so you're going to see

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Speaker 1: an outsize gaining demand for distillate fuels. So certainly if

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Speaker 1: we get a rainy a rainy spring, or a rainy

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Speaker 1: fall so forth, and it kind of delays the planting

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Speaker 1: or the harvesting. H if you're in the fall, that is,

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Speaker 1: that's certainly going to impact your demand patterns. And then

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Speaker 1: of course we get into the summer. So from an

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Speaker 1: oil standpoint, it all depends, uh, certainly at points of

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Speaker 1: the year. At some points this look fields are going

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Speaker 1: to lead the market. Were is what we're going to

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Speaker 1: start to see in the Midwest, and the points gasoline

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Speaker 1: is going to drop the market typically around the holiday

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Speaker 1: season of course, and then once we get into the

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Speaker 1: vacation season. In the summer, well, there you go, vacation

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Speaker 1: season is coming up. Let's price gasoline going to be

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Speaker 1: for people who are going to get in the cars.

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Speaker 1: But we got spring great coming up here. People are

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Speaker 1: going to be um. Obviously prices are low, but where

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Speaker 1: do they go as the driving season picks up. Well,

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Speaker 1: historically they're going to increase. And it's going to be

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Speaker 1: a factor of of two variables here. Of course, one

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Speaker 1: is the increased demand more cars on the road. Uh,

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Speaker 1: and so the constraints that's going to be putting on

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Speaker 1: manufacturing gasoline and getting gasoline to where it needs to

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Speaker 1: be of course at your local pump. But also it's

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Speaker 1: going to be the factor of the summer grade gasoline.

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Speaker 1: So right now we blend for gasoline or in the winter,

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Speaker 1: you're gonna blend for gasoline that has a different vapor pressure.

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Speaker 1: But once we get into the summer, you're going to

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Speaker 1: have to you lower your vapor pressure for environment mental reasons.

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Speaker 1: So of course to blend for lower vapor pressure. When

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Speaker 1: you get twenty year, so petrochemicals that go into making

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Speaker 1: a gallon of gasoline much harder, so you'll you'll probably

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Speaker 1: get like a thirty forty cent increase at the pump,

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Speaker 1: but given where prices are right now, and it's still

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Speaker 1: extremely favorable once we get into the summer. And Stephen

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Speaker 1: Shark is known for hyper detailed reports. We protect the

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Speaker 1: copyright of all our guests. We're not going to send

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Speaker 1: you the short report. Contact Stephen Short. Stephen. In the

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Speaker 1: back of your report, you have a fabulous eight paragraphs

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Speaker 1: which is titled this is a tragedy. You rip apart

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Speaker 1: the jobs report and the arch thing that Mike McKee

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Speaker 1: and I hear from our listeners, and maybe what Mr

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Speaker 1: Trump hears from his listeners or Mr Sanders here's from

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Speaker 1: his listeners, which is a quality of job formation. You

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Speaker 1: were stunned at the gift of low energy, and we're

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Speaker 1: not creating the jobs we need to create. Disgust at

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Speaker 1: slily and when natural gas is at three dollars? Uh?

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Speaker 1: When it when it's fun when we guess natural gas

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Speaker 1: prices um crash. Someone in a discussion I was given

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Speaker 1: down Houston asphalt. Isn't this the catalyst for a manufacturing

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Speaker 1: renaissance in this country? And I absolutely agreed, And this

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Speaker 1: this was a question from a man from a very

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Speaker 1: large steel company. So certainly the the comparative advantage that

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Speaker 1: we have over the world with our energy costs and

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Speaker 1: the fact that we are not creating jobs. Guys, by

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Speaker 1: eighteen on the current trends since the Great Recession, they're

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Speaker 1: going to be more people waiters and bartenders than are

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Speaker 1: working in factories in mills in this country. And if

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Speaker 1: we look back at the job creation since the Great Recession,

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Speaker 1: or or i should say this last week's jobs report,

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Speaker 1: it was heralded, it was great because we had so

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Speaker 1: many jobs to adren added into the private sector. Guys,

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Speaker 1: more than half of those jobs were on industries that

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Speaker 1: pay five dollars five fifty dollars a week, that is

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Speaker 1: minimum wage jobs that that we are creating. And that's

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Speaker 1: certainly not any sort of engine of growth. And hence

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Speaker 1: why you're getting the bizarre results that we're seeing in

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Speaker 1: the election. When Donald Trump and Bernie Standers are you know,

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Speaker 1: are are getting so much positive consideration, there are obviously

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Speaker 1: a lot of people out there that are concerned. So

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Speaker 1: that is the tragedy. What's going to happen when oil

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Speaker 1: and energy prices either move higher or the rest of

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Speaker 1: the world catches up to these low prices and we

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Speaker 1: lose that advantage. If we can't make hate now when

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Speaker 1: the sun is shining, what happens when the clouds appear?

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Speaker 1: And that is indeed a very scary thought for me.

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Speaker 1: You know, I look Steve at at the job dynamics

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Speaker 1: and folks, I can't convey the amount of mail we

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Speaker 1: get when the job optimists I'm going to call them

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Speaker 1: show up. Part of this is incentivize investment. If we

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Speaker 1: incentivized energy investment would mean a thing to me, it would.

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Speaker 1: I mean, the industries basically in chaos until they sort

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Speaker 1: the new price out, aren't they? Oh yeah, I know,

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Speaker 1: absolutely so? Uh uh? And but what's what's going to

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Speaker 1: happen now? Now? From a job standpoint, those jobs aren't

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Speaker 1: coming back. We've lost a hundred and fifty thousand jobs

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Speaker 1: if not more, in the energy sector. And these are

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Speaker 1: jobs that pay fourteen six hundred dollars a week. I mean,

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Speaker 1: these are these are the best pan jobs out there.

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Speaker 1: So unfortunately those jobs will come back, but not nearly

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Speaker 1: to the degree that we've lost it. But in the end,

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Speaker 1: what we're seeing now is this retrenchment, forced retrenchment on

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Speaker 1: the U S energy industry. And this is something that

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Speaker 1: I can't imagine that OPEC did not see this happening.

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Speaker 1: This industry, the North American industry, is going to come

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Speaker 1: out of this depression and there in their innur sphere

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Speaker 1: of the world, and they're going to come out of

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Speaker 1: this that much stronger. They're gonna come out with once

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Speaker 1: you get through the M and A activity wants you

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Speaker 1: let these debt laid and in piece that is, if

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Speaker 1: the banks ever let them crash, they're going those assets

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Speaker 1: are going to be had for cents on the dollar.

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Speaker 1: The productivity, the efficiency games are going to be that

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Speaker 1: much greater, the margins are going to be that much fatter.

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Speaker 1: And hence why I'm doubtful that we'll ever see seventy

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Speaker 1: oil at any which was the breaking point of the

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Speaker 1: bear market. I doubt we'll ever get there at any

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Speaker 1: point in the foreseeable future, because this industry is going

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Speaker 1: to be that much better. And guys, let's not forget

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Speaker 1: the other reason why especially wants low oiler prices, the intellastics.

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Speaker 1: The price and elasticity of demand for gasoline is falling

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Speaker 1: because what I'm calling it the Elon Musk effect. You

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Speaker 1: have substitutes into this market, so we're as we will

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Speaker 1: get a popping demand. That demand is not going to

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Speaker 1: be commensurate with other pops of demand we've seen in

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Speaker 1: the past, because now I have alternatives. The test like

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Speaker 1: drive out putting them avenue in Greenwich when I lived

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Speaker 1: up in Greenwich twenty years ago, which is America, let's

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Speaker 1: be honest. Well, right, but the status car on Greenwage

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Speaker 1: Avenue was what the Humby, which got like seven yards

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Speaker 1: to the gallon drive down Greenwage Avenue. Today it's the Tesla.

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Speaker 1: So inside of one generation we've completely turned the demand

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Speaker 1: economics on its head and the cheese out of the bottle.

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Speaker 1: So we're not going back and wait until we see

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Speaker 1: the impact of dry roast technology on inelasticities. So OPEC

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Speaker 1: is aware of this. They're they're fighting a losing battle.

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Speaker 1: They're just trying along it a little bit more. One

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Speaker 1: minute for our Canadian listeners. Give us an update on

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Speaker 1: how Canada is faring with Brent crude. It's it's brutal,

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Speaker 1: as bad as it is in the US oil patch

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Speaker 1: and everywhere from North Dakota down through Houston, you go

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Speaker 1: out through Canada and Canada their their biggest problem is

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Speaker 1: there at the end of the pipe. So the complete

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Speaker 1: dynamics what's happening natural gas has decimated the Canadian natural

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Speaker 1: gas market because you've got so much gas being produced

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Speaker 1: to my home state here in Pennsylvania close the border

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Speaker 1: in eastern Ohio with the Uticus shale that we've completely

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Speaker 1: changed the epicenter of the Canadian natural gas market because

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Speaker 1: we're exporting and those exports are going to grow into Ontario.

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Speaker 1: So we've completely displaced the western Canadian market at this point.

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Speaker 1: So this is something that Canada is dealing with right now,

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Speaker 1: considering that just trading part of the United States doesn't

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Speaker 1: need one of their key exports right not to that

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Speaker 1: normal to grade. Steven got to see again when you're

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Speaker 1: in New York. Great briefing Stephen Shark, the Shark Report

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Speaker 1: of Pennsylvania just fabulous and his his research there um

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Speaker 1: on the February jobs report about you know, great jobs

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Speaker 1: report with revisions, a terrific jobs report, but the income

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Speaker 1: makeup is gives one pause, Mike, It's interesting he wades

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Speaker 1: into that debate. Yeah, he took a real right turn there,

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Speaker 1: like we like that within all of our guests, John Riding,

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Speaker 1: thank you, Stephen Short, thank you, Tomorrow Mario Dragging will

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Speaker 1: be our guest in the eight thirty hour. This is

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Speaker 1: Bloomberg's surveillance