Speaker 1: Broadcasting live to New York Bloomberg eleven, Rio to Washington,
Speaker 1: d C Bloomberg to Boston, Bloomberg Well under It to
Speaker 1: San Francisco Bloomberg nine six to the country sis XM
Speaker 1: Channel one nineteen, and around the globe the Bloomberg Radio
Speaker 1: plus Appen Bloomberg dot Com. This is taking Stock. I'm
Speaker 1: Kathleen Hayes, my co host Pim Fox on vacation. This week,
Speaker 1: we're gonna be taking a look at oil. The prices
Speaker 1: down about forty seven bucks of barrel after being firmly
Speaker 1: above fifty bucks for just a few weeks. Will uh
Speaker 1: kind of bottlenet caused by oil field services help boost
Speaker 1: that oil price again? While our guests coming up on
Speaker 1: the show now, Sean Heinrath from a t Kearney in
Speaker 1: Houston says, don't count out. He's got a very fascinating explanation.
Speaker 1: And we're gonna take a look at the breaking news
Speaker 1: in the last half hour. Apple facing a potential tax
Speaker 1: bill running into billions of euros as the EU poises
Speaker 1: to release of finding into its dealings with Ireland as
Speaker 1: soon as tomorrow. Well, we don't have to wait tomorrow
Speaker 1: for this Charlie Pelletts in the news room, and he's
Speaker 1: got a Bloomberg business flash, and I think of Kathleen Hayes.
Speaker 1: Let's begin with Apple shares now trading unchanged one oh
Speaker 1: six ninety six on shares of Apple. You were mentioning
Speaker 1: crude oil West Texas Intermediate down one and a half percent,
Speaker 1: falling seventy cents of barrel on w t I forty
Speaker 1: ninety three. Right now, Brent crew down one point one percent,
Speaker 1: down fifty six cents thirty seven. Natural gas heading the
Speaker 1: other direction, off now by three tenths of one percent
Speaker 1: to eighty eight per million bt us on natural gas.
Speaker 1: Oil is declining them with doubts that producers will agree
Speaker 1: on a deal to stabilize the market when global suppliers
Speaker 1: meet next month for informal talks. Jason Schenker is chief
Speaker 1: economists at Prestige Economics. He was interviewed this morning on
Speaker 1: Bloomberg Television. A town of this is very different than
Speaker 1: anything we've seen in a while from OPEC. Uh. You know,
Speaker 1: they've had side meetings before, but they haven't been formally announced.
Speaker 1: Uh of the press release directly from the OPEC secretariat,
Speaker 1: and you've got different members saying they might do this,
Speaker 1: they might do this. Uh, you know, and I don't
Speaker 1: think personally that they're going to change their production levels,
Speaker 1: but the fact that that could be on the table
Speaker 1: if prices fall further is something that has stemmed prices.
Speaker 1: Here man, we will have more on oil coming up
Speaker 1: right here on taking stock. Herbal Life shares trading higher
Speaker 1: after billionaire Carly Com bought more than two point three
Speaker 1: million shares in the embattled nutrition company that has the
Speaker 1: high profile that that is the high profile target of
Speaker 1: fellow billionaire activist investor Bill Ackman. Herbal Life up now
Speaker 1: by three point nine two thirty two on Wall Street. Now,
Speaker 1: let's take a look at other news from around the world.
Speaker 1: Thank you, Charlie from the Bloomberg Newsroom. I'm Matt Miller.
Speaker 1: One of Hillary Clinton's closest aids, Huma abbot In, said
Speaker 1: she's separating from her scandal plagued husband. Former Congressman Anthony
Speaker 1: Weiner ween to resigned from Congress in two thousand eleven
Speaker 1: after he was caught texting intimate pictures of himself to women.
Speaker 1: There's now a report that he again exchanged sexually charged
Speaker 1: messages with another woman the White House says the United
Speaker 1: States today is meeting President Obama's goal of admitting ten
Speaker 1: thousand Syrian refugees during the current fiscal year. After a
Speaker 1: slow start, the administration was able to hit the goal
Speaker 1: a month ahead of schedule. Brazil's suspended president has made
Speaker 1: an emotional appeal to keep her job. Joe Marussa urged
Speaker 1: senators today to vote against her impeachment. She said it
Speaker 1: would amount to her death sentence and would put Brazil's
Speaker 1: democracy at risk. Julia l Chi, Bloomberg's Salpoulo bureau chief,
Speaker 1: spoke with Bloomberg Television. She mentioned that a few times
Speaker 1: people people kept asking her, will your resign? Will you resign?
Speaker 1: And she says, it's just not in me. I don't
Speaker 1: give up, I don't fight, And she kept saying she's
Speaker 1: not fighting for her terms, she's fighting for democracy and
Speaker 1: justice and just reiterated that she is innocent of the
Speaker 1: crime he's being accused of. Businesses on North Carolina's outer
Speaker 1: banks are watching tropical weather systems that could rain out
Speaker 1: one of the last busy weeks of the summer tourist season.
Speaker 1: One tropical depression is about three hundred miles southeast of
Speaker 1: the Cape Hatteras Beaches and is moving northeast. In the
Speaker 1: Gulf of Mexico. Another tropical depression is churning west of
Speaker 1: Key West Global News twenty four hours a day, powered
Speaker 1: by over twenty hundred journalists and analysts and more than
Speaker 1: one twenty countries. I'm Matt Miller. This is Bloomberg, and
Speaker 1: we thank you what again recapping The stocks are rallying
Speaker 1: with the SMP five hundred index up twelve, a gain
Speaker 1: of six tenths of one percent of ten year up seconds,
Speaker 1: the yield one point five six. I'm Charlie Platon. That's
Speaker 1: a Bloomberg business flash. You're listening to taking stock with
Speaker 1: bim box at Kathleen Hayes on Bloomberg Radio. Taking stock
Speaker 1: of the energy market. We step back. Two big forces
Speaker 1: at work of You say a global supply glut uh
Speaker 1: that has not been sufficient and reduced. Others say, well,
Speaker 1: global demand that keeps rising. Sooner or later that all
Speaker 1: price will not on lea surpass fifty bucks of barrowbable
Speaker 1: head to sixties seventy even higher. Our next guest is
Speaker 1: looking at oil field services. This may be key this
Speaker 1: part of the industry to how prices performed. Next, Sean
Speaker 1: Heinroth is a principal oil and gas at the consulting
Speaker 1: from A. T. Kearney and he's joining us from Houston, Texas,
Speaker 1: the heart of US oil country. Shaun, welcome, Hey, thank
Speaker 1: you very much. Kathleen, happy to be here. So, UH,
Speaker 1: tell us broadly how the oil field services fits into
Speaker 1: the industry right now and why it's so important to
Speaker 1: your outlook for how quickly oil prices can rise and
Speaker 1: how long they can stay at higher levels A couple
Speaker 1: of things, Kathleen, I think that the oil field service
Speaker 1: industry as a whole is a very complementary piece to
Speaker 1: what determines ultimately what we're able to supply UH in
Speaker 1: the energy side of the equation. So they work with
Speaker 1: operators and provide a lot of the technology and and
Speaker 1: frankly just the labor that goes into UH providing the
Speaker 1: oil and gas that UH is ultimately consumed in the
Speaker 1: petrochemical and refining industries. And so UH they are one
Speaker 1: half of that equation in a sense. Okay, And so
Speaker 1: what is the state of the oil field services, What's
Speaker 1: what's the struggle? Why is this going to be so
Speaker 1: important to the outlook for oil I think a couple
Speaker 1: of things that have gone on here. As we entered
Speaker 1: into late two thousand and fourteen, we had a very
Speaker 1: typical oversupply in the industry that we see periodically on
Speaker 1: the order of every five to ten years. A couple
Speaker 1: of things that were different that happened back in two
Speaker 1: thousand and fourteen and continue today. One is UH with
Speaker 1: the oversupply, it came at a time when there were
Speaker 1: a couple of sluggish economies both throughout Asia and Europe,
Speaker 1: so we did and get that normal response to lower
Speaker 1: fuel prices that come with an oversupply situation. The second
Speaker 1: that's more interesting and more specific to oil field services
Speaker 1: is this promise of unconventionals here in North America, and
Speaker 1: we're beginning to see evidence of another regions of the
Speaker 1: world has begun to take full effect. And with that,
Speaker 1: the oil field service companies have been at the forefront
Speaker 1: really of defining UH that promise through the technology and
Speaker 1: through the capital investments that they've made on their half
Speaker 1: UH that are really complementary to a lot of the
Speaker 1: funds that the operators were pushing into the industry. UH.
Speaker 1: And I'll say, for instance, if we look just at
Speaker 1: the permium base in here out in West Texas and
Speaker 1: New Mexico. Uh, compared to two years ago, well, activity
Speaker 1: is determined by oil field services companies is down almost
Speaker 1: seventy yet production is almost flat. It's it's roughly percent down.
Speaker 1: And a lot of that, uh efficiency or productivity growth
Speaker 1: has really been enabled through advancements at the oil field
Speaker 1: service companies have been able to create through R and
Speaker 1: D programs and through efficiency programs that really the operators
Speaker 1: are standing to benefit from. So, in other words, people
Speaker 1: have been kind of worried about the energy market being
Speaker 1: you know, somebody layoffs under maintain ascids, that the oil
Speaker 1: field services be this big bottleneck as demand for crude
Speaker 1: begins to pick up and that could cause prices to
Speaker 1: your rise. You're kind of letting us know maybe not,
Speaker 1: maybe probably not. Uh. What about Also though the OPEC meeting,
Speaker 1: you know, next month, informal talks for all these big
Speaker 1: global suppliers are going to be taking place. How's that
Speaker 1: going to enter into what's the key question to the
Speaker 1: price of oil? Ahead of that? I think when I
Speaker 1: think about what OPEC is able to do, certainly the
Speaker 1: decisions that come out of those meetings have the potential
Speaker 1: to create an uptick in the market. Uh maybe through
Speaker 1: just the shifting of uh kind of the depression that's
Speaker 1: taken place in the market. I think a lot of
Speaker 1: people have, you know, thought a year ago this market
Speaker 1: would already have begun its recovery, and here we are
Speaker 1: a year later, effectively below or or at where we
Speaker 1: were this time last summer. Um. But frankly, any decision
Speaker 1: that's made by OPEC and in some of the other
Speaker 1: large producing companies, I have a feeling will be more
Speaker 1: temporary in nature and really delay the inevitable. Uh. When
Speaker 1: I look at the numbers and and the reserve potentials. Uh,
Speaker 1: you know, the the unconventional base that's here in North
Speaker 1: America and other regions around the world has the potential
Speaker 1: to really disrupt OPEC and other large producing nations ability
Speaker 1: to really regulate and control the market. Maybe they can
Speaker 1: do it in the next couple of years, but I
Speaker 1: think they're reaching the end of their rope in terms
Speaker 1: of overall demand and what percentage they control of that.
Speaker 1: Where's the price of oil going next? Are you suggesting
Speaker 1: maybe it's going down because there's not going to be
Speaker 1: this bottleneck or where do you see what we're all
Speaker 1: going from here? I think there'll be some short term
Speaker 1: volatility of it, depending on what happens in next month's meetings,
Speaker 1: But when I look at the fundamentals, it supports a
Speaker 1: more moderate growth position UH in terms of pricing over
Speaker 1: the next several years, and so we will get back
Speaker 1: to those seventy and eighty dollar pricing levels, but that
Speaker 1: will come partly through inflation and partly through increase demand
Speaker 1: over an extended period of time. Sean Heyra, thank you
Speaker 1: so very much for joining us principle for oil and
Speaker 1: gas at a consulting company A T. Kearney in Houston, Texas.
Speaker 1: So up next, we are going to be taking a
Speaker 1: look at a couple of very big stories. In particular Apple,
Speaker 1: it may be facing billions of euros in tax arreers
Speaker 1: according to an EV decision pending that we don't know
Speaker 1: for sure yet. This is Bloomberg Caesar's entertainment. Can it
Speaker 1: remove one more log jam ahead of the road to
Speaker 1: getting out of bankruptcy? Another big story today coming up
Speaker 1: on taking stock Bloomberg Radio