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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.

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Speaker 1: Along with my co host Lisa Bramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. I'm

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Speaker 1: very pleased to introduce Tim Armstrong, chief executive officer of Oath,

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Speaker 1: which is a subsidiary of Verizon follow following their acquisition

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Speaker 1: of Yahoo ao L. He comes to us from the

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Speaker 1: Consumer Electronics Show in Las Vegas. Tim, thank you so

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Speaker 1: much for being with us. I want to start by

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Speaker 1: asking what exactly does Oath want to be? Does it

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Speaker 1: want to be a content provider, a major search engine,

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Speaker 1: or a media distribution platform. So, Lisa, thanks for having

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Speaker 1: me on. Uh, let's take a giant step back and

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Speaker 1: I'll explain Oath in the context of where the world's

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Speaker 1: going from a consumer standpoint. UH, there's one really significant

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Speaker 1: trend that we're seeing across all types of media right now,

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Speaker 1: which is the acceleration of consumers adopting mobile as their

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Speaker 1: content medium of choice. Verizon is a company that has

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Speaker 1: is a global leader in network technology, broadband and wireless,

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Speaker 1: and is now on the forefront and and the leader

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Speaker 1: in five G which is going to bring even more

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Speaker 1: connectivity and bandwidth the consumers. Verizon acquired ao L and

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Speaker 1: Yahoo informed Oath to essentially bring what is the linear

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Speaker 1: transition of content into the mobile world. And we are

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Speaker 1: one of the leaders in the world right now of

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Speaker 1: mobile content and distribution for consumers. So when you ask

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Speaker 1: what Oath is, Oath is a moble media company that's

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Speaker 1: attached to one of the best mobile companies in the world, Verizon,

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Speaker 1: and our goal is to superserve consumers and things like sports, news,

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Speaker 1: finance video. We just announced yesterday that we're going to

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Speaker 1: be broadcasting on mobile live video the four NFL games

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Speaker 1: and the United States UH this weekend, the playoff games.

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Speaker 1: So as a consumer, you can download the Yahoo Sports

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Speaker 1: app and instantaneously watch the NFL games the playoff games

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Speaker 1: this weekend. And for consumer who loves mobile and who's

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Speaker 1: on mobile UH, that is an unbelievably great experience and

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Speaker 1: a real, real visionary on Verizon's part to think about

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Speaker 1: the mobile consumers not just a wirelessly connected UH network connection,

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Speaker 1: But what's the service and what's the content love that

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Speaker 1: consumers have? And that's really what Verizon's goal is is

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Speaker 1: to bring a lot more great services to the mobile consumer.

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Speaker 1: Is the idea here that the mobile consumer looks at

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Speaker 1: different information or uses media in a different way than

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Speaker 1: just streaming UH and any device or is it that

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Speaker 1: you can get different ad AD dollars for for mobile

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Speaker 1: specific streaming? Yeah, the you know the mobile consumer. First

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Speaker 1: of all, the mobile consumers we see at the high end,

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Speaker 1: meaning the consumers that consume the most un mobile have

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Speaker 1: crossed over the TV amount of time per day. So

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Speaker 1: the high end mobile consumers right now are consuming about

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Speaker 1: four hours of content a day on their phones. And

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Speaker 1: that's important because basically those the phones become a personalized

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Speaker 1: cable box to a large degree, and the experiences that

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Speaker 1: consumers have are able to get more and more personal

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Speaker 1: and more and more targeted. So if you think in

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Speaker 1: the future whether or not a consumer would want to

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Speaker 1: trade off their their mobile personalized content consumption and go

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Speaker 1: back to more of a linear consumption, I think most

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Speaker 1: consumers would say no. So the business model is to

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Speaker 1: superserve consumers on moble with content and services. The revenue

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Speaker 1: part of Verizon's business in our business is to also

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Speaker 1: super serve the advertisers with mobile, and I think if

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Speaker 1: you look at the ad market today, most customers are trump.

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Speaker 1: Most of our ad customers are trying to figure out.

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Speaker 1: First of all, they were trying to figure out how

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Speaker 1: to go from linear to the internet. Mobile came out

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Speaker 1: of nowhere and surpassed just about every usage metric you

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Speaker 1: can see on the Internet. So now they're trying to

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Speaker 1: figure out how to go from linear to internet to mobile.

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Speaker 1: And we have one of the most significant ad platforms

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Speaker 1: and networks between Verizon and Oath, So we're able to

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Speaker 1: super serve what the next generation of advertising is going

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Speaker 1: to be. And we have a great program, great product,

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Speaker 1: and great platform to do that in a lot of

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Speaker 1: data to help customers target. So that that's the simple

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Speaker 1: business model, but very powerful in terms of how we're

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Speaker 1: thinking about the future. Tim Marmstrong, how do you respond

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Speaker 1: to questions about the price tag? Verizon spent more than

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Speaker 1: nine billion dollars on a o L and yeah, who

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Speaker 1: I understand that it's going to cost about a billion

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Speaker 1: and a half for these NFL the four NFL games

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Speaker 1: that you mentioned, when do shareholders get to see a

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Speaker 1: return on that more than ten billion dollars on what

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Speaker 1: seems like now a content deal rather than a tech deal.

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Speaker 1: So PIM, I would say, you know, basically, one of

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Speaker 1: the things that just to take a step back on

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Speaker 1: that on that question is, um there's only three or

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Speaker 1: four companies on the planet that have a billion consumers

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Speaker 1: on digital and mobile. Oath is one of them. If

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Speaker 1: I told you today was your first day on planet Earth,

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Speaker 1: and you had Amazon, Ali Baba, Facebook, Google, Apple and

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Speaker 1: those companies, and what those valuations were, and then there's

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Speaker 1: a company that is purely based on mobile and purely

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Speaker 1: based on internet technology that had a billion users, and

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Speaker 1: I said that a company was able to acquire that

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Speaker 1: company for billion dollars, you'd for one time's revenue. For

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Speaker 1: what those companies do, I would say, singularly, it might

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Speaker 1: be the best M and a transaction for the future

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Speaker 1: ever done. The second thing I would say is when

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Speaker 1: you look at the M and a landscape of what's

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Speaker 1: happened in the media landscape and how much people have

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Speaker 1: paid for media acquisitions, and then I told you we

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Speaker 1: did the NFL deal, which is probably the most powerful

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Speaker 1: content and sports and live sports which people are really

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Speaker 1: competing for. And it was on mobile and it was

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Speaker 1: a five year deal and we had a billion users

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Speaker 1: show two in a hundred millions members have Verizon. Again,

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Speaker 1: I think you'd say, in comparison to the other m

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Speaker 1: and a content deals, smart deal, smartly done at the

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Speaker 1: smart at smart prices. So I I would uh, I'd

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Speaker 1: put a totally opposite look on your question, which is,

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Speaker 1: if I describe the assets we have, the fact that

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Speaker 1: we're mobile and the fact that we have great content

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Speaker 1: and great brands, what would that be worth in comparison

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Speaker 1: to the other valuations at other companies? Um, I think

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Speaker 1: it's an unbelievably great opportunity for Verizon shareholders to play

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Speaker 1: in the new economy. And Verizon is investing in five G,

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Speaker 1: so we we feel really good about like the future

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Speaker 1: strategy and where things are going. Tim Uh, you say

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Speaker 1: that oath has more than one billion users now, and

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Speaker 1: I'm just wondering how much that has grown over the

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Speaker 1: past year and whether it's been accelerating decelerating. What's the trend? Like? Yeah,

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Speaker 1: so our our trend is basically our business basically a

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Speaker 1: mobile Uh, you know, grew double digit percent in Q

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Speaker 1: four overall, and even in comparison to some of the

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Speaker 1: other UH social platforms and mobile platforms, we had what

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Speaker 1: i'd say is probably top quartile growth UH in Q

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Speaker 1: four overall. And then as a service level, I'll give

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Speaker 1: you another example in mail for instance, which is a

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Speaker 1: major product for US, where we have hundreds of millions

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Speaker 1: of people that use our email products. Emails surpassed mobiles

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Speaker 1: are passed desktop there so I think we're seeing the

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Speaker 1: exact growth we want, which is the transition from desktop

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Speaker 1: to mobile, and our overall consumer usage base has been

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Speaker 1: growing and we expect that to continue to happen with

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Speaker 1: mobile for for two reasons. One is our services are

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Speaker 1: getting better targeted and getting on more mobile phone tops.

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Speaker 1: The second reason is there's another three billion people that

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Speaker 1: are going to be connecting to mobile and skipping the

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Speaker 1: Internet and going directly to mobile. And because we have

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Speaker 1: very good mobile products, we expect to get growth not

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Speaker 1: just in the US, but also globally on our brands

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Speaker 1: and services and our ad business from that that new

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Speaker 1: adoption of mobile that's happening globally. I want to thank

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Speaker 1: you very much, Tim Armstrong. He is the chief executive

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Speaker 1: of Oath, a subsidiary of Verizon. He's speaking to us

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Speaker 1: from the Consumer Electronics Show in Las Vegas earlier this year. January,

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Speaker 1: California State Teachers Retirement System one hundred and ninety billion

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Speaker 1: dollar pension, joined with Jana Partners to issue a letter

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Speaker 1: to Apple. Uh. Calisters is actually a pretty big shareholder

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Speaker 1: in Apple as well as Jana Partners, and they were

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Speaker 1: asking for a study to look at how using iPhones

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Speaker 1: would affect children in particular. I want to spring in

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Speaker 1: and she hand. She's director of corporate Governance for Calisters.

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Speaker 1: Joining us from Sacramento, California, and thank you so much

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Speaker 1: for joining us. I just want to start with how

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Speaker 1: this letter came about. Did Calisters reach out to Jana Partners? Uh,

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Speaker 1: did Jana come to you? And what was sort of

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Speaker 1: the motivation behind it? Thanks and thanks for having me well.

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Speaker 1: I've had a long standing relationship with Jana Partners. UM.

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Speaker 1: They are one of the activist investors, as you know,

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Speaker 1: out in the market, and we have a relationship with

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Speaker 1: all the activists we employ. Some Janna is not one

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Speaker 1: of our managers, but I've known those folks, I've worked

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Speaker 1: with them and collaborated with them on some other issues

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Speaker 1: on their whole foods. We were um talking to them

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Speaker 1: about that and some of the work that they did

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Speaker 1: in Falcom. So I've had a long standing relationship with

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Speaker 1: Barry Rosenstein and Charlie Penn are from them, and so

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Speaker 1: we are frequently talking about issues of mutual interest to

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Speaker 1: both of us. With regard to companies, Janna knows that

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Speaker 1: Calsters is a long time s G focused investor. We

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Speaker 1: spent a lot of time here in the corporate governance

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Speaker 1: program on talking to companies about issues that we think

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Speaker 1: are concerns and risks to the portfolio and to the

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Speaker 1: performance of the company in the long run. So as

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Speaker 1: I've talked to Janna about some of our E s

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Speaker 1: G issues and they had talked to me about beginning

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Speaker 1: to think about putting an E s G type of

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Speaker 1: fund together, UM we came up with the idea of

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Speaker 1: of combining and talking to Apple about this issue. So

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Speaker 1: it made sense. Apple is a our single largest holding

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Speaker 1: in our global equity portfolio. I have a very good

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Speaker 1: relationship with the Apple folks. They've always been very responsive

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Speaker 1: and we felt that this was a good important issue

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Speaker 1: as we've seen the compelling research about the impact and

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Speaker 1: the more research that's coming about about the impact of

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Speaker 1: some of these products, not just the social media issues

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Speaker 1: of Facebook and all, but also the impact of the

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Speaker 1: iPhones on kids. And so we thought this is an

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Speaker 1: issue that we showed raise with the company, see what

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Speaker 1: they're doing, See if they could do more, because for

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Speaker 1: us a counselors, it represents a potential risk to the performance,

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Speaker 1: the long term performance of the company, and so our

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Speaker 1: goal was to bring this to the attention Apple, see

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Speaker 1: what they're doing, See what more could be done to

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Speaker 1: prevent any diminution of our value in our investment with Apple.

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Speaker 1: Can you connect the dots for why uh? A lack

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Speaker 1: of addressing this issue would cause a long term decline

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Speaker 1: and Apple service. I think the issue is a lot

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Speaker 1: of parents are very concerned about the impact of these

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Speaker 1: devices with their children. We've seen the research more we

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Speaker 1: we as a teacher's fund, we hear from teachers and

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Speaker 1: I've we've got a lot of response back about the

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Speaker 1: letter that we have sent from teachers who have seen

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Speaker 1: what is going on in the classroom with these and

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Speaker 1: so we see this as potentially reputational risk for Apple,

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Speaker 1: and so it's an opportunity to create more choices and options,

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Speaker 1: which we think is good business for them, which could

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Speaker 1: help their share price in the long run. When we

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Speaker 1: look at some of these issues, they're very long term

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Speaker 1: because we're going to be in these stocks for a

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Speaker 1: long time, So we see reputational risk as a potential

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Speaker 1: to hurting the performance of these portfolio companies. Now, you've

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Speaker 1: got more than two hundred and fifteen billion dollars of

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Speaker 1: assets under management. If you're let me just put it

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Speaker 1: to you this way. If you don't like what the

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Speaker 1: company is doing, or you wish they would do something else,

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Speaker 1: why not just sell the stock and buy a company

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Speaker 1: that you do support. So you're right. We actually have

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Speaker 1: about two hundred and twenty seven billion assets under management.

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Speaker 1: Over half of that is in public equities and two

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Speaker 1: thirds of that the overwhelming majority of that is in

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Speaker 1: the index. So we own the entire market, and as

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Speaker 1: Chris Aleman our Cio likes to say, we will own

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Speaker 1: the market as long as there are teachers in the

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Speaker 1: state of California. So we do not believe in selling

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Speaker 1: as a way to address an issue. We believe in

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Speaker 1: engagement because we're going to be in the stock today, tomorrow,

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Speaker 1: in ten years, and twenty years, and in fifty years.

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Speaker 1: So our approach here at Counsels is to engage the

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Speaker 1: companies on issues like this another risk. We've talked to

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Speaker 1: a lot of companies about these types of issues. Human capital, diversity,

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Speaker 1: capital allocation, whatever the issue is, is the best way

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Speaker 1: to address this because we are the ultimate universal long

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Speaker 1: term shareholder. And have you noticed that other big public

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Speaker 1: pensions have joined you in being increasingly activist. Yes, many

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Speaker 1: public funds. New York City is very active, New York State, UM,

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Speaker 1: the Canadian Public Pension Fund has been active. I mean,

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Speaker 1: there are many pension funds around the world that are

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Speaker 1: very active in their engagements with companies. What we like

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Speaker 1: to say is we're passive investors and active owners, so

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Speaker 1: we engage the companies in our portfolio. Would you take

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Speaker 1: the same position for the lack of women as CEOs

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Speaker 1: of s I mean, I believe we have. Yes, The

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Speaker 1: answer is yes. Diversity is one of our key corporate

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Speaker 1: governance issues here at Calsters. We have for the past

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Speaker 1: eight or ten years engage boards on the lack of

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Speaker 1: women on their corporate boards, the lack of women in

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Speaker 1: senior leadership, including CEOs, and so that is another issue

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Speaker 1: that we cared deeply about because the research shows that

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Speaker 1: if you have greater diversity inside the boardroom as well

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Speaker 1: as in the workforce, including in the CEO, you get

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Speaker 1: better performance in the companies. The with credit, Sweet and

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Speaker 1: McKenzie have shown that diversity creates better shareholder value in

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Speaker 1: the long run. So that's another issue that we have

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Speaker 1: spent a great deal of time and as you can appreciate,

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Speaker 1: and with a teacher's son like us, two thirds of

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Speaker 1: our members are female. So it's an issue that resonates.

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Speaker 1: And here in California, we're a very diverse state. We

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Speaker 1: gotta leave it there, but thank you very much. And

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Speaker 1: she and is director of corporate governance for a California

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Speaker 1: state teachers retirement system that's Calisters and they're based in Sacramento, California.

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Speaker 1: How will US public policy affect your investments? Well, one

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Speaker 1: person to ask is Michael Jesus. He is the chief

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Speaker 1: US public Policy and municipal Strategists for Morgan Stanley. He

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Speaker 1: joins us in our eleven three oh studios. Michael, thank

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Speaker 1: you for being here, thanks for having so maybe just

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Speaker 1: outline I know that You've got three policy channels that

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Speaker 1: you say investors ought to pay attention to. What are they? Well,

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Speaker 1: it's regulatory, legislative, and trade. Um. The legislative one is

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Speaker 1: fairly simple. Uh, if you look at what's on the agenda. Uh.

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Speaker 1: The only thing that we think really kind of matters

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Speaker 1: to market in the macro economy is whether or not

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Speaker 1: to get an infrastructure deal done. Um. In our view,

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Speaker 1: the politics of getting that deal done before the midterm

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Speaker 1: are really tough. And then we've got a lot of

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Speaker 1: questions about the efficacy of the policy itself, right, which

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Speaker 1: I could go into detail too if you want, But

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Speaker 1: where it's basically telling investors is this is something you

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Speaker 1: need to educate yourselves on and maybe the midterms is

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Speaker 1: going to open up a channel to an infrastructure spend.

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Speaker 1: That's uh. That that's a boost to the economy, but

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Speaker 1: it's not as near term risk as some of these

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Speaker 1: other channels, namely the trade channel, where you actually have

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Speaker 1: some hard deadlines in the next six weeks or so,

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Speaker 1: where the administration is going to make some decisions that

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Speaker 1: are going to tell us whether or not we're actually

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Speaker 1: moving in a somewhat more protection this direction. I want

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Speaker 1: to home in on the trade issue, because we haven't

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Speaker 1: talked as much about that and that has the greatest

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Speaker 1: potential in the short term to cause some serious market disruption.

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Speaker 1: So can you walk us through the deadlines that we're

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Speaker 1: facing and what the potential market response would be. Yeah, So,

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Speaker 1: I mean, just quick background. The President has the authority

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Speaker 1: under a number of different US laws to issue tariffs, right,

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Speaker 1: and whether or not those tariffs are in compliance with

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Speaker 1: w t O rules a sort of a moot point.

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Speaker 1: The administration can do it if they want to. UM.

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Speaker 1: There are a number of actions that were started last

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Speaker 1: year under a couple of different trade laws, the most

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Speaker 1: notable one in the nine four Trade Act UM, which

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Speaker 1: have now moved past kind of the study period, and

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Speaker 1: the administration has to decide whether or not the institute tariffs,

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Speaker 1: so on January twenty six in February two respectively, UM,

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Speaker 1: the administration has to decide whether or not it's going

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Speaker 1: to put tariff on solar panels and on washing machines. Right,

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Speaker 1: and you seem a little narrow, but these would be

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Speaker 1: the first hypothetical actions, UM, which could be a signaling

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Speaker 1: of a more protection that's bent. On January fifteenth January

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Speaker 1: twenty one. There are reports do so they don't trigger

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Speaker 1: actions per se, but there are reports do on steel

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Speaker 1: and aluminum that are supposed to recommend whether or not

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Speaker 1: the administration that's supposed to begin a tariffing regime on

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Speaker 1: those products. So the possible market response is that washing

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Speaker 1: machines and solar panels get more expensive or is it? What? What? What?

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Speaker 1: What are we looking for here? Yeah, well, you know,

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Speaker 1: it's interesting that there's a lot of data about how

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Speaker 1: at the end of the year overseas manufacturers of washing

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Speaker 1: machines actually up their exports into the US and anticipation

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Speaker 1: of some of these risk kind of coming to fruition.

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Speaker 1: So whether or not you're washing machines about to cost

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Speaker 1: more or less, it's kind of an open question. But um,

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Speaker 1: I mean, I think obviously we're we're studying this pretty carefully.

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Speaker 1: FX markets are going to be an obvious potential kind

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Speaker 1: of shock absorber for this. Uh. The easiest thing to

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Speaker 1: say on this is that when there were general fears

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Speaker 1: about the US being a little more protectionist, it showed

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Speaker 1: up in dollar PASO UM and hero meeting declined against

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Speaker 1: the dolls. Yeah, I would, I would expect that you

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Speaker 1: would see that be kind of a similar signaling mechanism, because, UM,

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Speaker 1: certainly the Trump administration would not be the first administration

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Speaker 1: to pursue kind of a single product terror if the

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Speaker 1: Bush administration did this temporarily in the early two thousands.

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Speaker 1: But given that they were talking about a broader, more

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Speaker 1: protectionist regime like exiting NAFTA, UM, any kind of single

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Speaker 1: product action might be a signal that they're going to

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Speaker 1: take a harder stance on NAFTA. I'm glad you brought

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Speaker 1: up NAFTA because Tom Donohue, who was the president of

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Speaker 1: the US Chamber of Commerce, in a speech today, said

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Speaker 1: that withdrawal from NAFTA by the Trump administration would be

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Speaker 1: a quote grave mistake. He says, the bottom line is

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Speaker 1: growth will be weakened, not strengthened or sustained if we

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Speaker 1: pulled back from trade. So, if indeed that were to happen,

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Speaker 1: would that just offset whatever economic gains are being predicted

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Speaker 1: or estimated because of the tax overhaul bill. Yeah. I

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Speaker 1: mean here we rely on kind of the studies from

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Speaker 1: various third parties, and I think the economic consensus is,

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Speaker 1: you know, I don't know, it's a one for one offset.

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Speaker 1: But in the near term, there's there there's some you know,

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Speaker 1: there's definitely some contraction that offsets the stimulus that you're

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Speaker 1: that you're getting in here. Um, you know, how it's

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Speaker 1: executed obviously, is there's a lot of devils in the

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Speaker 1: details there. But I think yeah, I mean, it's fair

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Speaker 1: to say that the market is going to consume this

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Speaker 1: as not growth friendly for lack of bear's room. Michael,

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Speaker 1: have you ever in your career gotten more calls from

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Speaker 1: clients wondering what is going on? Um? Probably on election night,

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Speaker 1: but yes, no, no, no, I mean the fourth quarter

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Speaker 1: of last year was just a sort of barrage of

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Speaker 1: tax questions, right and unfortunately have some colleagues are really

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Speaker 1: good on the minutia of tax policy to help us

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Speaker 1: out on that, and um, you know, now we're onto Obviously,

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Speaker 1: infrastructure is still a big incoming question. But trade is

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Speaker 1: definitely picking up now because a lot of these things

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Speaker 1: were a little little minutia aspects of the law and

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Speaker 1: vote counting and process that didn't matter, and they matter

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Speaker 1: a lot right now. Michael Jesus, thank you so much

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Speaker 1: for joining us. Michael Jesus, Chief US Public Policy and

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Speaker 1: municipal strategist for Morgan Stanley. So if you see an

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Speaker 1: increase in the price of a washing machine, you'll know why.

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Speaker 1: Right now, I want to bring in Vincent Piazza, senior

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Speaker 1: equity energy analysts and global sector leader for Bloomberg Intelligence. Vincent,

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Speaker 1: I feel like there is an increase seeing amount of

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Speaker 1: disagreement when it comes to the price of crude. You

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Speaker 1: have some saying that OPEC will try to talk down

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Speaker 1: prices if oil top seventy dollars a barrel, where a

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Speaker 1: city group sees the price of crude climbing towards eighty

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Speaker 1: dollars a barrel, which we be paying most attention to here.

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Speaker 1: I think we always have this type of vociferous debate

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Speaker 1: around New Year, right Uh. A new year starts, we

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Speaker 1: look ahead and try and read all of the tea leaves.

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Speaker 1: Um conclusion is no one really knows, right um. What

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Speaker 1: we have today is a a two pronged attack. Right

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Speaker 1: You have OPEC trying to control capacity to really control

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Speaker 1: that price, and you have prices now bleeding into the

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Speaker 1: sixty dollar range, which allows US operators to turn on

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Speaker 1: to spigot again. Right uh. And we we've talked about

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Speaker 1: this from time to time. The resilient output, the shorter

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Speaker 1: cycle response of US and U shale to this UH

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Speaker 1: price signal and production has been extremely resilient. We're marching

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Speaker 1: towards UH nine point seven nine point eight million barrels

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Speaker 1: per day. We were looking at output over ten million

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Speaker 1: barrels per day estimates we've seen for twenty nine point

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Speaker 1: to roughly eleven million barrels per day for the US.

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Speaker 1: So the resiliency of output continues to press forward, and

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Speaker 1: that does concern um OPEC because what tends to happen

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Speaker 1: is as that price bleeds higher, compliance with output curbs

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Speaker 1: tends to decline, and you tend to see those barrels

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Speaker 1: bleed through Vincent. What about the companies that use fossil

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Speaker 1: fuels as a feedstock? Are they still in a good position.

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Speaker 1: I keep thinking of the refiners in their performance last

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Speaker 1: year and the year before. Right, So if you take

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Speaker 1: a look at this past week um uh fe UH

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Speaker 1: five million barrels of a crude UH fell from the

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Speaker 1: stockpiles UM, but we've added roughly eight eight point four

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Speaker 1: million barrels in gasoline and distill It's so the refiners

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Speaker 1: are definitely taking advantage of that wide price differential between

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Speaker 1: w t I and Brent roughly six dollars at the moment,

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Speaker 1: and they're definitely continuing to produce those refined products. UH.

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Speaker 1: Fernando Vallet, who is my colleague on the refining side,

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Speaker 1: he covers the space. He does a very good job

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Speaker 1: of it. UM. He noted that the crack spreads have

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Speaker 1: definitely weakened UM and that supply glut from the crude

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Speaker 1: side has moved over to the product side. And even

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Speaker 1: with the export market allowing for a channel to move product,

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Speaker 1: we still have uh this uh increased capacity flowing into

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Speaker 1: inventories for for refined products. But as long as you

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Speaker 1: have that wider spread, it's advantageous UH for the refiners

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Speaker 1: to maintain that elevated that elevated utilization even during this

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Speaker 1: shoulder season period. Can you just give us a sense

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Speaker 1: quickly of the interests here, because Goldman put out this

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Speaker 1: report saying that OPEC would try to talk prices down

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Speaker 1: if they got close to seventy dollars a barrel, which

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Speaker 1: seems counterintuitive because don't they want prices to go up, Well,

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Speaker 1: they want prices to be at a level that is

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Speaker 1: economically sufficient, but what they want. What they don't want

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Speaker 1: is compliance among the nations who have agreed to this

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Speaker 1: supply cut to decline and barrels come back onto the market.

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Speaker 1: They want this compliance to be tight to sort of

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Speaker 1: manage this process, this price process um. It's been an

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Speaker 1: engineered capacity curb curb um and additional barrels onto the

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Speaker 1: market on top of what US can produce that will

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Speaker 1: tend to pressure the price point of of crude benchmarks.

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Speaker 1: Thanks very much for coming in and sharing this with

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Speaker 1: us absolutely. Vincent Piazza is our senior equity energy analyst

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Speaker 1: and global sector leader for Bloomberg Intelligence. He basically knows

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Speaker 1: everything about the energy market. I think that's a good

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Speaker 1: way to say it. Thanks for listening to the Bloomberg

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Speaker 1: P and L podcast. You can subscribe and listen to

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Speaker 1: interviews at Apple Podcasts, SoundCloud or whatever podcast platform you prefer.

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Speaker 1: I'm pim Fox. I'm on Twitter at pim Fox. I'm

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Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.

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Speaker 1: You can always catch us worldwide on Bloomberg Radio.