WEBVTT - Energy, Equities, and Tech (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.599 at Bloomberg dot com slash podcast. Of course, here in 0:00:22.640 --> 0:00:25.079 the US, we have the SMP year to date off 0:00:25.160 --> 0:00:29.080 more than and asked that close to thirty percent. When 0:00:29.080 --> 0:00:31.080 you go over to the UK, it's not nearly as bad. 0:00:31.200 --> 0:00:34.680 The foot seat down around nine percent from it's high 0:00:34.720 --> 0:00:37.920 of the year. Uh so just some you know, a 0:00:37.960 --> 0:00:40.400 little bit better performance. But it's been a crazy, i 0:00:40.400 --> 0:00:42.080 don't know week or ten days or over the UK. 0:00:42.159 --> 0:00:44.280 Let's get the latest what's going on in the UK 0:00:44.320 --> 0:00:46.080 and new euro markets. We do that with Tim Craighead. 0:00:46.080 --> 0:00:48.839 He's a director of Research and senior European strategist for 0:00:48.920 --> 0:00:53.360 Bloomberg Intelligence. He's based in London. Tim, crazy time for 0:00:53.600 --> 0:00:56.560 the UK market and just the I'm talking to stock market, 0:00:56.640 --> 0:00:59.120 the currency market, the bond market in the last ten day. 0:00:59.160 --> 0:01:03.120 Because you're only down from a pounds but at the 0:01:03.120 --> 0:01:05.119 beginning of your a pound was a dollar thirty five, 0:01:05.240 --> 0:01:10.800 right now it's a dollar twelve. The currency issue is 0:01:10.840 --> 0:01:13.600 always an interesting when year to date, I'll make it 0:01:13.640 --> 0:01:15.480 even sound better, year to date that puts he's down 0:01:15.480 --> 0:01:18.040 about five and a half percent, but again in local currency. 0:01:18.400 --> 0:01:22.000 Um so, look, it has been crazy. Actually used that 0:01:22.040 --> 0:01:26.040 word earlier this morning and something I was writing, and um, 0:01:26.040 --> 0:01:29.319 you know, part of this is what's going on with politics, 0:01:29.480 --> 0:01:33.240 with a new Prime minister putting forward some policies that 0:01:33.880 --> 0:01:39.520 clearly have calls disturb Part of this is um folding 0:01:39.600 --> 0:01:42.920 through into the bond markets, where we've had a Catharsis 0:01:43.080 --> 0:01:46.840 of sorts because of some you know, I won't go 0:01:46.959 --> 0:01:50.720 into the detail, but this thing called liability driven investments, 0:01:50.760 --> 0:01:53.760 which is how pension plans across the UK have been 0:01:54.200 --> 0:01:56.640 trying to deal with the low interest rate environment, has 0:01:56.720 --> 0:02:01.440 caused sort of havoc um at all sorts of issues, 0:02:01.480 --> 0:02:04.840 like even the Bank of England, while it wants to 0:02:05.040 --> 0:02:08.799 tighten policy, it's had to be buying bonds to make 0:02:08.800 --> 0:02:12.639 sure that the market was functioning appropriately. All sorts of 0:02:12.680 --> 0:02:15.400 craziness and in the end, um, you know, we end 0:02:15.480 --> 0:02:18.840 up with the UK trading at about the foot see 0:02:18.880 --> 0:02:23.280 trading at about eight point seven times forward earnings, which 0:02:23.360 --> 0:02:28.239 is pretty freaking nice from the standpoint evaluation. The question 0:02:28.320 --> 0:02:30.280 is where do we go from here? And we're looking 0:02:30.360 --> 0:02:34.120 right in the teeth of of the third quarter earnings, 0:02:34.480 --> 0:02:39.200 and I think that's the that's the key for the 0:02:39.240 --> 0:02:42.720 overall European market right now. We haven't seen negative revisions. 0:02:43.320 --> 0:02:48.799 We think their heads are still spinning from what's happened 0:02:48.840 --> 0:02:51.280 over the past couple of weeks, right, but um, well, 0:02:51.440 --> 0:02:53.960 you know the thing, Matt, I think this is like 0:02:54.040 --> 0:02:57.880 super interesting. You know, there's always a question of consensus 0:02:57.960 --> 0:03:01.880 numbers and you know, are they Is that really what 0:03:01.960 --> 0:03:05.720 investors are thinking? The third quarter maybe the period where 0:03:05.760 --> 0:03:10.120 we see negative revisions, but stocks bounced because the market 0:03:10.200 --> 0:03:13.959 is already there. Um and if that's the case, along 0:03:13.960 --> 0:03:18.160 with some technical indicators that show a washout, maybe that's 0:03:18.200 --> 0:03:20.360 in a good indication. But I think you gotta watch 0:03:20.360 --> 0:03:23.720 how stocks trade on bad news. Shell today was off 0:03:23.960 --> 0:03:27.840 on bad news. That's not a good indication. So in 0:03:28.160 --> 0:03:31.440 the UK and across Europe, I mean, is the expectation 0:03:31.680 --> 0:03:36.000 that a recession is going to be longer, deeper, perhaps 0:03:36.000 --> 0:03:39.400 than maybe the market's discounting or what's the market discounting? 0:03:39.400 --> 0:03:45.880 Do you think? Yeah, so, our our work is suggesting 0:03:45.960 --> 0:03:50.240 that the market right now is discounting a low single 0:03:50.360 --> 0:03:55.000 digit decline in earnings for two thousand twenty three. If 0:03:55.040 --> 0:04:00.280 we end up having excuse me, plus cut in two 0:04:00.320 --> 0:04:04.040 thousand twenty three earnings and broadly across Europe at least 0:04:04.080 --> 0:04:06.560 to have some downside, you know. And it's one of 0:04:06.560 --> 0:04:13.080 those things where um did everybody's talking recession um, but 0:04:13.200 --> 0:04:16.440 there's still hope that we sort of skirt through UM. 0:04:16.520 --> 0:04:21.200 And frankly, part of this weather exactly part of this 0:04:21.240 --> 0:04:23.599 is going to be the weather. You know, how cold 0:04:23.760 --> 0:04:25.960 is it and how much energy do we have to 0:04:26.000 --> 0:04:31.080 curtail from a business perspective to keep people warm? You know, Man, 0:04:31.120 --> 0:04:33.480 I thought I just pictured Tim Hard at work at 0:04:33.480 --> 0:04:37.960 his desk in Queen Victoria Street. Not the case, niece, France. 0:04:38.440 --> 0:04:40.760 Explain yourself, Tim, what are you doing in these France? 0:04:42.080 --> 0:04:44.839 Am I am at? I am at a conference where 0:04:44.920 --> 0:04:47.920 tomorrow I will be presenting on some of the longer 0:04:48.040 --> 0:04:52.200 term structural issues that are causing higher for longer inflation 0:04:52.360 --> 0:04:55.200 and what does it mean? So all right, let's front runner. 0:04:55.279 --> 0:04:56.960 Let's front run your talk, what are some of the 0:04:56.960 --> 0:05:01.880 structure reasons. So so our basic premise, and I'm I'll 0:05:01.920 --> 0:05:04.560 give full credit to Gina Martin Adams because a lot 0:05:04.600 --> 0:05:06.120 of this is based off some of the good work 0:05:06.160 --> 0:05:10.520 that she's been doing. But you think about demographics that 0:05:10.560 --> 0:05:15.200 are reducing labor supply all else being equal, You think 0:05:15.240 --> 0:05:21.599 about deglobalization, which is reducing are accelerating the trend of 0:05:22.120 --> 0:05:25.239 the cheap import to be in a source of disinflation. 0:05:25.440 --> 0:05:30.120 You know, that's that's yesterday's news. Anything about decarbonization, which 0:05:30.200 --> 0:05:35.920 is not only driving investments that are sucking up basic commodities, 0:05:36.360 --> 0:05:40.720 but it's also reducing investment in things like hydrocarbon fuels, 0:05:40.760 --> 0:05:44.600 all of which keep energy prices and probably even underlying 0:05:44.640 --> 0:05:48.600 metals higher for longer. You take those three and you 0:05:48.720 --> 0:05:51.640 end up with inflation that yes, it may come off 0:05:51.680 --> 0:05:54.359 the boil, but we're not going back to pre pandemic levels. 0:05:54.680 --> 0:05:57.920 And if inflation is that way, then bond rates, you know, 0:05:58.200 --> 0:06:01.520 interest rates are going to stay somewhat elevated, and that 0:06:01.640 --> 0:06:06.839 all helps drive increased politility in markets. So it's it's 0:06:06.920 --> 0:06:08.440 you know, it's one of those things where then it 0:06:08.480 --> 0:06:11.960 depends there's still opportunities because you know, markets do price 0:06:12.040 --> 0:06:14.800 some of this stuff in. But clearly, UM, we've been 0:06:14.839 --> 0:06:17.640 through a rough patch and there's still some slopping just 0:06:17.800 --> 0:06:19.720 to come. All I know is that when I'm asked 0:06:19.720 --> 0:06:23.560 to speak at the conference, it's usually in Cleveland in January, 0:06:23.960 --> 0:06:27.480 you know, not Nice France. I seem to think, Paul, 0:06:27.560 --> 0:06:30.200 you you've made the trip from New York to con 0:06:30.480 --> 0:06:32.840 be course, I think I might have done. That might 0:06:32.880 --> 0:06:34.920 be right, he might be right there calling me out. 0:06:34.920 --> 0:06:38.719 Tim Craig, head Director Research, Senior European strategist for Bloomberg Intelligence, 0:06:38.960 --> 0:06:46.960 reporting live from Nice. I guess okay. Plus, I just 0:06:47.000 --> 0:06:50.960 finished up their first in person get together since March 0:06:50.960 --> 0:06:54.080 of That was in Vienna. That closed up yesterday. A 0:06:54.080 --> 0:06:56.160 lot going on in the global space, so we need 0:06:56.200 --> 0:06:59.560 to check in with Amina Baker, chief OPEC correspondent and 0:06:59.640 --> 0:07:03.440 Dubai Deputy Bureau Chief for Energy Intelligence. I mean, and 0:07:03.640 --> 0:07:06.640 I know you're back in London after spending time in Vienna. 0:07:06.680 --> 0:07:10.040 I'd love to start with just this crazy stories about 0:07:10.120 --> 0:07:14.640 the UM the North Stream leaks caused by detonations, uh 0:07:14.640 --> 0:07:17.280 and maybe a sign of of of sabotage. What's the 0:07:17.360 --> 0:07:21.160 latest that you know. Um. Yeah, the latest is that 0:07:21.200 --> 0:07:25.240 there is the Swedish investigation into the pipeline leaks and 0:07:25.320 --> 0:07:31.040 their suspicion is of sabotage. Um. And uh yeah, they 0:07:31.160 --> 0:07:35.200 basically said that they there might have been an incident. 0:07:35.640 --> 0:07:39.520 They're still investigating. We understand that Russia isn't part of 0:07:39.560 --> 0:07:43.760 the team that it's investigating what happened. But um, they 0:07:43.760 --> 0:07:47.280 said that there was also extensive damage calls to these pipelines, 0:07:47.440 --> 0:07:50.680 and there's no clear timeline or budget on how these 0:07:50.680 --> 0:07:52.440 pipelines are going to be repaired, so a lot of 0:07:52.600 --> 0:07:58.960 uncertainty there. So I mean, obviously they're not coordinating with Russia, 0:08:00.000 --> 0:08:05.520 nobody is in the West. But OPEC seems to be right. Um. 0:08:05.640 --> 0:08:09.400 The I just think astounding the cut. Even if they 0:08:09.400 --> 0:08:12.440 don't really cut two million barrels and we're hearing that, um, 0:08:12.480 --> 0:08:16.120 the reality could be could be less than a million. Um, 0:08:16.160 --> 0:08:20.600 it still sends a message to the West. OPEC is 0:08:20.680 --> 0:08:24.520 firmly on the side of China and Russia in this 0:08:25.120 --> 0:08:29.560 sort of new paradigm, this new world order. Could it 0:08:29.600 --> 0:08:34.520 be any clearer? Or am I just seeing this too cynically? Uh, 0:08:34.559 --> 0:08:37.760 it's you're stating the obvious, and you're stating something that 0:08:37.800 --> 0:08:41.120 I think the general public would like to buy into. 0:08:41.559 --> 0:08:43.800 And more and more, I think this war has really 0:08:43.880 --> 0:08:47.880 polarized the East and the West, and taking a neutral 0:08:47.960 --> 0:08:50.800 stance against this war is no longer acceptable. I find that, 0:08:51.080 --> 0:08:55.000 you know, countries are being forced to to take sides, 0:08:55.040 --> 0:08:58.280 and if they don't take sides, UH, their actions are 0:08:58.320 --> 0:09:01.960 are immediately and indicative of which side they're on. And 0:09:02.000 --> 0:09:04.160 that's the case with OPEC plus. I think. I mean 0:09:04.400 --> 0:09:06.520 at the UN General Council, you saw many of the 0:09:06.520 --> 0:09:10.880 Gulf States, actually all of the Gulf States voted UH 0:09:11.080 --> 0:09:13.120 against the war. Everybody wants to see an end to 0:09:13.160 --> 0:09:16.480 this humanitarian crisis. It's it's not fair to to let 0:09:16.520 --> 0:09:19.720 it to go on. UM. With OPEC plus, yes, the 0:09:19.760 --> 0:09:22.920 headline figure is two million bears garls a day cut. 0:09:23.440 --> 0:09:25.079 We're probably going to see a cut of a million 0:09:25.080 --> 0:09:27.320 barrels a day a little bit under UH. We'll see 0:09:27.320 --> 0:09:30.400 how that goes. It depends on the countries. UM. It 0:09:30.480 --> 0:09:35.520 does send a bad signal to many of the consumer states. 0:09:35.760 --> 0:09:38.560 You saw the reaction from the US, from the Biden administration, 0:09:38.679 --> 0:09:43.320 especially UH saying that it's it's the wrong move. UH. 0:09:43.520 --> 0:09:47.160 And on. The move was criticized. Um, but oil prices 0:09:47.200 --> 0:09:51.480 didn't move that much. They're at dollars. I mean that 0:09:51.600 --> 0:09:55.480 was like a two percent jump, so um. Because there 0:09:55.559 --> 0:09:58.000 is so much uncertainty in the market. I mean, the 0:09:58.040 --> 0:10:03.400 reason they took this step is one, there's an unprecedented 0:10:03.520 --> 0:10:06.720 uncertainty on both the demand and the supply side. We've 0:10:06.760 --> 0:10:10.760 never seen this level of uncertainty before in the past 0:10:10.880 --> 0:10:14.520 three decades or so, so they needed to prepare themselves. 0:10:14.520 --> 0:10:18.800 They needed to free up more spare capacity city in 0:10:18.880 --> 0:10:21.920 anticipation that when the EU sanctions and when the price 0:10:21.960 --> 0:10:24.200 caps come into effect, we are going to see a 0:10:24.240 --> 0:10:27.720 disruption and oil supply from Russia. At Energy Intelligence we 0:10:27.840 --> 0:10:31.880 estimate UM oil supply from Russia to be reduced by 0:10:31.960 --> 0:10:36.080 a million point to UH one point two sorry million 0:10:36.120 --> 0:10:39.360 barrels a day. Uh And somebody needs to make up 0:10:39.360 --> 0:10:41.880 for that supply. So if they don't cut now and 0:10:41.960 --> 0:10:44.720 free up more spare capacity, they won't be able to 0:10:44.760 --> 0:10:48.319 supply the market again. UM. So I would just wait 0:10:48.400 --> 0:10:52.880 and see how open plus reacts when we get a disruption. 0:10:53.280 --> 0:10:55.000 I'm sure some of that supply is going to come back. 0:10:55.440 --> 0:10:57.600 I mean just about thirty seconds how bad is it 0:10:57.600 --> 0:11:00.160 going to be from an energy consumption and availability this 0:11:00.200 --> 0:11:05.160 winter in Europe? Well, Uh, it is. I mean, we 0:11:05.280 --> 0:11:07.360 we've heard that a lot of European countries have have 0:11:07.440 --> 0:11:10.120 stalked up. They seem to be better place and UH 0:11:10.280 --> 0:11:14.920 compared to UH in previous months. They're prepared. But the 0:11:14.960 --> 0:11:17.600 problem is not just this winter, how about the coming 0:11:17.640 --> 0:11:21.440 one UM. Energy crisis is going to continue with us 0:11:21.480 --> 0:11:25.400 for a while. So yeah, alright, good stuff. Amina Baker, 0:11:25.160 --> 0:11:28.720 Baker chief OPEC corresponded and to buy Deputy Bureau Chief 0:11:28.720 --> 0:11:31.360 for Energy Intelligence, giving us kind of the latest coming 0:11:31.400 --> 0:11:35.880 out of the European energy UH situation very difficult with 0:11:35.880 --> 0:11:39.199 the war obviously UH in Ukraine and the supply that 0:11:39.360 --> 0:11:43.360 was critical for much of Europe from Russia now dramatically curtailed. 0:11:43.720 --> 0:11:46.360 We had the OPEC plus meeting in Vienna the past 0:11:46.400 --> 0:11:48.680 couple of days, and again the headline coming out of 0:11:48.679 --> 0:11:52.400 there is OPEC plus agreeing to cut production by two 0:11:52.559 --> 0:11:55.920 million barrels per day UM and we'll have to see 0:11:56.000 --> 0:12:00.680 what that means for this market going forward. We want 0:12:00.679 --> 0:12:04.320 to continue our energy discussion. We started off this half 0:12:04.320 --> 0:12:06.679 hour kind of getting from the European perspective coming out 0:12:06.679 --> 0:12:08.880 of Vienna. On the global stage, Let's take a look 0:12:08.880 --> 0:12:10.439 at the U S energy space. We do that with 0:12:10.440 --> 0:12:13.920 Scott Levine, senior energy and industry analysts for Bloomberg Intelligence. 0:12:14.320 --> 0:12:16.600 And Scott we've had a little bit of a stabilization 0:12:16.679 --> 0:12:19.960 here in oil prices. Talked to us about the oil stocks. 0:12:20.400 --> 0:12:21.920 You know, I think about some of the oil services 0:12:21.960 --> 0:12:24.439 names that you follow, like how Haliburton and Schlumbers A 0:12:25.120 --> 0:12:28.440 those stocks have done great. Is the energy play done 0:12:28.679 --> 0:12:30.560 for investors or is you still more room to go? 0:12:31.080 --> 0:12:33.400 I think there is more room to go, Paul Um. 0:12:33.720 --> 0:12:36.480 The reality here is that while these stocks have had 0:12:36.480 --> 0:12:38.800 a great year, as you mentioned, they've had a lousy 0:12:38.880 --> 0:12:44.040 run for the preceding five years, decade longer than that, right, 0:12:44.160 --> 0:12:48.320 like so uh, so, you know, the backdrop here is 0:12:48.400 --> 0:12:52.840 that the industry had been obsessed with growth and UH 0:12:53.000 --> 0:12:56.240 had ignored returns and as result of that had lost 0:12:56.280 --> 0:12:59.320 the confidence of the investment community, and so uh in 0:12:59.400 --> 0:13:02.160 order to get that back, they really need to demonstrate 0:13:02.600 --> 0:13:05.760 UH discipline. And so in a year where you've seen 0:13:05.800 --> 0:13:08.520 oil push a hundred and twenty dollars in the in 0:13:08.640 --> 0:13:13.679 March after the invasion of of Ukraine, Uh. Even before that, 0:13:13.760 --> 0:13:17.280 we saw oil prices rise, and investors really wanted to 0:13:17.320 --> 0:13:20.560 make sure that the industry was going to be measured 0:13:20.600 --> 0:13:23.640 in terms of uh, capitalizing that and growing in a 0:13:23.679 --> 0:13:27.079 discipline manner. And so we've seen that and uh, and 0:13:27.200 --> 0:13:30.439 I think the companies continue to demonstrate confidence that they 0:13:30.440 --> 0:13:35.160 will be restrained and and grow within a certain level 0:13:35.240 --> 0:13:39.400 of of of rational behavior. And is there any way 0:13:39.440 --> 0:13:42.120 to talk them out of that? I mean, is there 0:13:42.120 --> 0:13:45.160 any way to get them to pull all the oil 0:13:45.440 --> 0:13:48.400 out of the ground here, because otherwise we have to 0:13:49.040 --> 0:13:52.160 send our president over to Saudi Arabia having him court 0:13:52.280 --> 0:13:56.199 Mohammed bin Salmon or um, you know, change the rules 0:13:56.280 --> 0:13:59.480 so that we can remove sanctions from countries like Venezuela 0:13:59.559 --> 0:14:01.600 and tap their oil, Like why don't we just get 0:14:01.600 --> 0:14:04.679 our own? The industry can't grow like that, you know, 0:14:04.800 --> 0:14:06.720 even though you can add a little bit more rigs 0:14:06.760 --> 0:14:09.880 here on the margin here and there, etcetera. To ramp 0:14:09.960 --> 0:14:12.320 up production and ramp down production is a much more 0:14:12.320 --> 0:14:15.800 gradual process. So even in an environment like this, you 0:14:15.840 --> 0:14:18.760 see a spike and oil of ten fifteen dollars in 0:14:18.800 --> 0:14:21.040 a given week, and we've seen it up eight dollars 0:14:21.120 --> 0:14:23.480 or close to that. This week. You're not gonna see 0:14:23.520 --> 0:14:26.360 rig count on Friday jump by fifteen or twenty or 0:14:26.360 --> 0:14:28.320 anything like that, will be up by one or two. See, 0:14:28.360 --> 0:14:30.280 I think I'm just gonna go down to Texas myself 0:14:30.280 --> 0:14:31.520 and put a hole in the ground and get some 0:14:31.560 --> 0:14:34.600 re equipment. What's come back? Is it just that discipline? 0:14:34.680 --> 0:14:39.080 Do they not trust the government um or do they 0:14:39.280 --> 0:14:43.920 not really have that much spare capacity to tap? Yeah? 0:14:44.040 --> 0:14:46.360 Now there is this capacity. I think the it's a 0:14:46.400 --> 0:14:50.040 combination of the way the business works and the fact 0:14:50.120 --> 0:14:53.800 that gramping production is a gradual process, and also the 0:14:53.840 --> 0:14:57.560 past five years. And then they're committed to winning investors 0:14:57.600 --> 0:15:00.600 back to this sector after a lengthy all in turn, 0:15:01.040 --> 0:15:03.840 and and and they're committed to grow in a rational manner. 0:15:03.880 --> 0:15:06.240 That's really the key answer that. All right, anytime we 0:15:06.320 --> 0:15:08.720 talk energy, we need to get the political angle because 0:15:08.760 --> 0:15:11.040 it is a political football. And to do that, we 0:15:11.040 --> 0:15:14.960 welcome Joe Matthew Bloomberg News down and watching need CEC. 0:15:15.040 --> 0:15:17.360 We got Mint Bloomberg Interactive Brooker Studio in New York. 0:15:17.720 --> 0:15:20.560 Sound on from here today right from this spot. Yes, 0:15:20.600 --> 0:15:24.880 oh nice, alright, Joe. So this administration it's not well 0:15:25.040 --> 0:15:27.840 loved by our good friends down in Texas and Oklahoma. 0:15:28.640 --> 0:15:30.560 How do you think the administration or the just the 0:15:30.560 --> 0:15:33.560 political wins in d C are about our energy policy? Well, 0:15:33.600 --> 0:15:37.200 it's just it really has become a game of trust here, right. 0:15:37.240 --> 0:15:40.240 I had a former energy official from the Trump administration 0:15:40.240 --> 0:15:42.440 on the program last night and he says, hey, we 0:15:42.520 --> 0:15:45.400 got the band rolling here within a year. That that 0:15:45.440 --> 0:15:48.200 the Biden administration, if there were guarantees that came with 0:15:48.240 --> 0:15:51.000 the pleas for more production, could in fact start to 0:15:51.000 --> 0:15:53.520 see a meaningful increase within a year or so. I 0:15:53.520 --> 0:15:56.880 don't know if that's even realistic, but the Biden administration says, no, 0:15:56.960 --> 0:16:00.240 they're sitting on nine thousand, you know, Lisa's right. Still, 0:16:00.920 --> 0:16:03.760 absolutely they are. And of course the truth is probably 0:16:04.120 --> 0:16:06.320 somewhere in between because a lot of these companies haven't 0:16:06.320 --> 0:16:07.960 been approved to do some of the stuff they want. 0:16:08.240 --> 0:16:10.400 The political capital that was spent though on that fist 0:16:10.400 --> 0:16:13.240 bump is pretty remarkable here, and even Democrats are really 0:16:13.280 --> 0:16:14.720 angry about this. I don't know if you saw this 0:16:14.800 --> 0:16:18.120 tweet from Chris Murphy and Connecticut the Senator, I thought 0:16:18.120 --> 0:16:20.040 the whole point of selling arms to the Gulf States 0:16:20.040 --> 0:16:23.840 despite their human rights abuses, nonsensical Yemen war, working against 0:16:23.920 --> 0:16:27.600 US interests in Oblibias, Dan, etcetera. Was when an actual 0:16:27.760 --> 0:16:31.880 crisis came, the Gulf could choose America over Russia and China. 0:16:32.840 --> 0:16:34.720 And that's kind of what we're talking about here in 0:16:34.720 --> 0:16:40.000 the tweets from a Democrat from Connecticut. That is painful. Um, 0:16:40.080 --> 0:16:44.800 And yet we do sell them a ton of very 0:16:45.040 --> 0:16:48.880 serious weapons with which they kill a lot of people, 0:16:49.320 --> 0:16:52.560 you know, And I think it's difficult to stomach, especially 0:16:52.600 --> 0:16:54.400 if they're gonna side with Russia and China at a 0:16:54.400 --> 0:16:57.640 time like this. What about releasing the SPR. I mean, 0:16:57.800 --> 0:17:00.640 I thought back in the day that was for emergency purposes, 0:17:00.720 --> 0:17:03.840 but it seems like now it's for They goes on 0:17:04.000 --> 0:17:05.879 for a pretty long time here. It's kind of amazing 0:17:05.880 --> 0:17:08.400 that the conversation now though, is really about refilling it 0:17:08.760 --> 0:17:10.880 and whether the United States will go by Middle East 0:17:10.920 --> 0:17:13.359 oil at a premium to refill the SPR. That's gonna 0:17:13.359 --> 0:17:15.600 be a whole fun conversation after the holl of these two. 0:17:15.600 --> 0:17:18.840 All right, So we just want to get a sense here, Scott, 0:17:18.880 --> 0:17:21.400 of of the the big oil companies that you cover 0:17:21.560 --> 0:17:25.240 here in the US, are they bullish about oil longer 0:17:25.359 --> 0:17:28.399 term is the peak oil discussion thing in the past. 0:17:28.600 --> 0:17:31.160 But you're you're bullish on these companies, right, I am 0:17:31.400 --> 0:17:34.359 and UH. I think that the the biggest issue the 0:17:34.359 --> 0:17:39.080 companies really have had UH with the Biden administration is 0:17:39.200 --> 0:17:44.119 really the fact that they've been demonized with regard to UH, 0:17:44.320 --> 0:17:47.920 the whole energy transition. They're being made to be the 0:17:48.280 --> 0:17:52.119 black hat essentially, right. I think all the major oil 0:17:52.160 --> 0:17:56.960 field companies have renewable energy businesses, they're all involved in 0:17:57.000 --> 0:18:00.159 these types of things, but they feel like they've just 0:18:00.280 --> 0:18:03.359 been the whipping boy for so long, and the reality 0:18:03.480 --> 0:18:06.119 is the heart of their business. If you're Haliburton, if 0:18:06.119 --> 0:18:09.440 your slumberj is oil and gas production, okay, and it 0:18:09.480 --> 0:18:10.840 will be ten years from now, and it will be 0:18:10.920 --> 0:18:13.320 twenty years from now. Despite the fact that they're harvesting 0:18:13.320 --> 0:18:17.320 and growing all of these energy transition businesses to support 0:18:17.400 --> 0:18:21.920 hydrogen battery storage, slumberside and announcement theory yesterday that they're 0:18:21.920 --> 0:18:26.040 supporting lithium mining. They're involved in all those businesses, but 0:18:26.080 --> 0:18:29.000 they have feel like the government hasn't been forthright about 0:18:29.040 --> 0:18:32.480 the reality of the energy transition, how long it will take, 0:18:32.680 --> 0:18:36.000 and they feel like the demonization of carbon has has 0:18:36.040 --> 0:18:40.399 gone way too far. Look as the as the Saudi is, 0:18:40.400 --> 0:18:43.160 how they feel about Europeans burning trash to stay warm 0:18:43.200 --> 0:18:46.000 this winter. There's such a political side of this, and 0:18:46.000 --> 0:18:48.840 and it's such a global situation now that the United 0:18:48.880 --> 0:18:51.800 States may really find itself having to lean into this. 0:18:51.840 --> 0:18:54.520 The Biden administration wants to forward this transition. But as 0:18:54.520 --> 0:18:56.800 even Elon Musk, the king of the electric car, will 0:18:56.840 --> 0:18:59.879 tell you, we need more oil now to make that happen. So, 0:19:00.040 --> 0:19:02.320 I mean his administration are they sensitive to that, because 0:19:02.560 --> 0:19:04.720 I don't see it. I mean the kind of the 0:19:04.760 --> 0:19:08.919 comments that Scott sees from his companies. Just President Biden, 0:19:09.119 --> 0:19:11.480 what was he getting off a helicopter or something on 0:19:11.520 --> 0:19:13.800 the lawn at the White House saying the Middle Eastern 0:19:13.840 --> 0:19:15.920 trip to Saudi or aven trip wasn't about all. Didn't 0:19:15.920 --> 0:19:17.679 regret it, of course, but he said that before they 0:19:17.680 --> 0:19:19.760 went to so we wouldn't have this segment right now. 0:19:19.800 --> 0:19:21.720 But of course it was about oil largely, and it 0:19:21.760 --> 0:19:24.480 was about security. But you can't have security without oil 0:19:24.520 --> 0:19:27.600 and vice versa. Yes, Look, this is uh, this is 0:19:27.640 --> 0:19:29.639 an issue when you also hear reports now on the 0:19:29.720 --> 0:19:33.640 terminal about loosening sanctions against Venezuela. So you know which 0:19:33.680 --> 0:19:35.919 bad guy do you want to buy for room? All right, 0:19:36.160 --> 0:19:38.440 Joe Matthew, thanks so much for joining us on short notice. 0:19:38.480 --> 0:19:42.240 Joe Matthew Uh covering off Things, Washington, d C. For 0:19:42.320 --> 0:19:48.440 Bloomberg newsm Sound absolutely good stuff. Scott Levin, he covers 0:19:48.480 --> 0:19:52.359 the energy uh space Industrial space for Bloomberg Intelligence. Thanks 0:19:52.359 --> 0:19:54.880 those guys for joining us here in our Bloomberg Interactive 0:19:54.960 --> 0:19:58.560 Brokers studio. Looking at Wacoud oil, it's up seventy one 0:19:58.840 --> 0:20:01.240 eighty eight dollars forty five cents of barrel for w 0:20:01.320 --> 0:20:07.960 t I Crude. Well, this Elon Musk Twitter story is 0:20:08.040 --> 0:20:10.320 kind of like, you know, an accident you pass on 0:20:10.359 --> 0:20:13.080 the road. You can't you can't, you know, you can't 0:20:13.080 --> 0:20:14.960 help yourself at slowing down and take a look. And 0:20:15.000 --> 0:20:17.879 this has just been just an amazing saga here. So 0:20:17.920 --> 0:20:19.320 we want to break it down in some detail. We're 0:20:19.359 --> 0:20:21.840 gonna do that with Dan Ives, Managing Director and senior 0:20:21.880 --> 0:20:25.239 Equity analyst for web Bush Securities, also joining us here 0:20:25.240 --> 0:20:27.639 in our Bloomberg Interactive Broker Studios Men Deep Seeing. He's 0:20:27.640 --> 0:20:31.800 our senior technology analyst Bloomberg Intelligence. Dan, let's start with you, 0:20:32.840 --> 0:20:36.280 is Elon Musk gonna get this company? And if so, 0:20:36.880 --> 0:20:41.040 what's he gonna do with it? An easy part for 0:20:41.200 --> 0:20:43.520 Musk is actually buying It's a hard part. It's gonna 0:20:43.560 --> 0:20:46.320 be fixing it. I mean, Twitter has really been a 0:20:46.400 --> 0:20:48.400 disaster for the last four or five years, and from 0:20:48.400 --> 0:20:52.000 a growth perspective. But I think now there's still some 0:20:52.240 --> 0:20:54.879 high steaks poker going on between Musk and the Twitter 0:20:55.000 --> 0:20:58.560 board lawsuit. You're going to Delaware's the web and das 0:20:58.600 --> 0:21:00.919 away and I think to find nthing continues to be 0:21:01.040 --> 0:21:04.160 front and center, especially the debt financing, and I think 0:21:04.200 --> 0:21:08.720 that's caused some nervousness at Lease on the stock. Um 0:21:08.880 --> 0:21:10.640 is he going to be able to buy it? What's 0:21:10.680 --> 0:21:13.600 your what's your thoughts on whether or not he actually 0:21:13.640 --> 0:21:18.439 gets this deal done? Yeah? I believe now, especially the 0:21:18.480 --> 0:21:21.040 writing on the wall going into Delaware, I believe as 0:21:21.040 --> 0:21:24.159 early as next week he will own Twitter. You know, 0:21:24.200 --> 0:21:26.399 in terms of where this ultimately ends up the board, 0:21:26.560 --> 0:21:29.400 I think we'll agree to this, but you know, obviously 0:21:29.480 --> 0:21:32.800 what does that mean, Dan? I mean, if he's gonna 0:21:32.800 --> 0:21:36.240 own Twitter, he has to raise billions and billions of dollars. 0:21:36.600 --> 0:21:39.520 People are starting to back out. Now, surely the banks, 0:21:40.320 --> 0:21:43.440 well maybe the banks will try as well in terms 0:21:43.480 --> 0:21:45.320 of debt financing. So how does he does he have 0:21:45.359 --> 0:21:48.679 to sell Tesla shares? Yeah, so he So it's a 0:21:48.680 --> 0:21:52.120 great question because obviously it's weight on Tesla. He's sold 0:21:52.320 --> 0:21:55.760 already a significant trying about fifties billion in terms of 0:21:55.760 --> 0:21:58.520 tests of stock. You know, we've estimate he could sell 0:21:58.600 --> 0:22:01.800 upwards of another three big allion, but I think that's 0:22:01.840 --> 0:22:04.040 sort of a contained amount. Now when you talk about 0:22:04.080 --> 0:22:07.399 partners or other sort of banling, that obviously would add 0:22:07.440 --> 0:22:09.960 to some of the financing stress. But and it continues 0:22:10.000 --> 0:22:12.439 to be arguing. And know we've talked about four is 0:22:12.440 --> 0:22:15.640 that this was a nightmare deal from us and now 0:22:15.760 --> 0:22:20.600 ultimately he's basically trading in Calvia are testa stock for 0:22:20.640 --> 0:22:23.440 a two dollars slice of pizza and Twitter. That's I 0:22:24.200 --> 0:22:26.800 fully agree with that, But this is of his own making. 0:22:27.040 --> 0:22:29.600 Mendip Singh here, I want to bring you in. Let's 0:22:29.640 --> 0:22:35.080 assume Elon must buys Twitter. Realistically, you've known this company 0:22:35.160 --> 0:22:38.480