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Speaker 1: Charlie, thank you from the Bloomberg News Room, I Mark Crumpton.

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Speaker 1: President Obama says the United States respects the decision of

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Speaker 1: the British people to leave the European Union. Speaking in

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Speaker 1: Palo Alto, California, the President said key alliances with the

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Speaker 1: US won't change. The EU will remain one of our

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Speaker 1: indispensable partners, our NATO alliance will remain a quarter stone

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Speaker 1: of global security, and in a few weeks will be

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Speaker 1: meeting in Warsaw for the NATO Summit. And our shared values,

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Speaker 1: including our commitment to democracy and pluralism and opportunity for

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Speaker 1: all people in a globalized world. The President said he's

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Speaker 1: spoken by phone the British Prime Minister David Cameron and

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Speaker 1: his confident the UK is committed to an orderly transition

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Speaker 1: from the European Union. How Speaker Paul Ryan says the

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Speaker 1: U s UK relationship will continue as usual despite the gregsit.

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Speaker 1: He expects today's initial market volatility to level off. Obviously,

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Speaker 1: markets going to react when new news and information like

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Speaker 1: this occurs. I believe that markets will eventually stabilize. Russian

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Speaker 1: leaders are speaking out on the UK's historic decision. President

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Speaker 1: Vladimir Putin says it isn't the Kremlin's position to quote

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Speaker 1: interfere and decisions made by Britain by Minister Dmitri Medvedev

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Speaker 1: said the result had quote risks for the world economy

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Speaker 1: and therefore the Russian economy. The NYPD says it will

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Speaker 1: be on high alert for this weekend's NYC LGBT Pride March.

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Speaker 1: The festivities are expected to draw about one point six

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Speaker 1: million spectators, many more people than usual. Global news twenty

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Speaker 1: four hours a day, powered by more than twenty six

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Speaker 1: hundred journalists and analysts in more than one hundred twenty countries.

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Speaker 1: I'm Mark Crumpton. This is Bloomberg, Charlie, and we thank

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Speaker 1: you and again recapping equities lower part of a global

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Speaker 1: sell off, with the SMP downs seventy six points to

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Speaker 1: two thousand thirty seven, a drop there a three points

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Speaker 1: six percent. Our coverage continues right here on Bloomberg and

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Speaker 1: then Station. They'll stay with Bloomberg Radio all weekend long

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Speaker 1: for our continued coverage of Brexit, including special editions of

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Speaker 1: Bloomberg Surveillance Saturday and Sunday beginning at seven am. I'm

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Speaker 1: Charlie Pellett and that's a Bloomberg business flash. You're listening

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Speaker 1: to taking Stock with Bim Box and Kathleen Hayes on

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Speaker 1: Bloomberg Radio. Oil tumbling on with most commodities, a global

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Speaker 1: flight from risky assets after the UK voted to lead

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Speaker 1: the European Union. Whether the route last depends on how

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Speaker 1: world governments deal with the turmoil. We turned now to

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Speaker 1: Follow Gate, Managing director and oil and gas analysts at

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Speaker 1: Oppenheimer and Code, to get his analysis of what this

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Speaker 1: political economic financial event means for oil. Follow How surprised

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Speaker 1: were you by the outcome? It's uncertainty. It's basically sharing

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Speaker 1: the unknown. No one really knows exactly what the impact

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Speaker 1: will be very difficult to quantify, but the cell off

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Speaker 1: is likely to level off, and I would not be

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Speaker 1: surprised at all. In the next few days and few weeks.

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Speaker 1: UH oil prices were recovered on strong frain, on strong fundamentals.

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Speaker 1: In general. UH, the amand will continue to move at least,

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Speaker 1: you know, parallel to what we have before. But supply

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Speaker 1: is coming down, so therefore oil prices are likely to

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Speaker 1: move higher. The question is not if it is when

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Speaker 1: and by how much? Okay, In fact, the International Energy agency,

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Speaker 1: which is a Paris based advisor to industrialized nations, saying

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Speaker 1: in a statement today that the fundamentals of oil is

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Speaker 1: applied to main demand remain unchanged after the vote, basically

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Speaker 1: echoing what you're saying. I got followed with the with

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Speaker 1: the main risk here, perhaps the only risk be uh,

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Speaker 1: if there's some kind of global recession. And I just

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Speaker 1: saw some news breaking on the Bloomberg terminal having to

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Speaker 1: do with the UK and Moodies United Kingdom outlook Apparently

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Speaker 1: UH too negative by Moodies the ratings of firms, So

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Speaker 1: obviously for the United Kingdom this is reverberating. Is that

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Speaker 1: the is that the main dynamic that could change the

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Speaker 1: supply demand balance for oil? Yeah, basically global economic growth

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Speaker 1: will entail certain demand level and if that does not materialize,

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Speaker 1: obviously you're going to lose the other part of the equation.

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Speaker 1: It's supply and demand. You can talk about the demand,

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Speaker 1: but supply is heading down. There is no if for

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Speaker 1: butts about it. Because the industry has kept kept up

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Speaker 1: spending significantly over the last two years. The industry have

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Speaker 1: trouble maintaining production, let alone you know, grow in production

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Speaker 1: when all prices were eighty on hundred dollars, So nobody

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Speaker 1: should expect that the industry would be able no matter

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Speaker 1: what they can do. Will course, saving and you know,

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Speaker 1: efficiency improvement and all these things will not make up

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Speaker 1: for the drop of fifty dollar down. It is just impossible.

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Speaker 1: So demand will you know, move side away, but supply

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Speaker 1: will come down. So therefore the balances do. The question

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Speaker 1: again is when is it going to be by the

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Speaker 1: end of this year or early next year? You know, um,

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Speaker 1: we had our Bloomberg Intelligence Latin American economists on today,

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Speaker 1: Philip Fernandez. He said, basically, this is just not such

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Speaker 1: a big deal for the Latin American countries. Maybe some

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Speaker 1: impact on the Bank of Mexico if the pace will

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Speaker 1: gets hit again. Is it kind of a similar story

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Speaker 1: for the Middle East that this will be watched from Afar?

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Speaker 1: It will be that we have our own issues, our

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Speaker 1: own you know things, And of course this is one

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Speaker 1: of the this is the region where you most watch

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Speaker 1: for oil geopolitically, but no repercussions, no connections that matter

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Speaker 1: here to be with the EU. Yeah, I mean, you know,

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Speaker 1: I have to remember also the growth in energy and

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Speaker 1: oil demand, it's not coming from Europe. It's coming from

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Speaker 1: outside of your of in the US. And this is

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Speaker 1: where basically people look at the demand supply and the

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Speaker 1: demand is not coming is coming from China, it is

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Speaker 1: coming from India, and they will have very little to

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Speaker 1: do with whether the UK is in the European Union

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Speaker 1: or outside. So what use the price of oil going funnel? Well,

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Speaker 1: we still maintained that the new normal is going to

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Speaker 1: be somewhere in the sixty plus dollar level. Fifty percent

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Speaker 1: of US producer cannot sustain operation unless or until oil

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Speaker 1: prices exceed sixty dollars. So this is the price that

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Speaker 1: we are going to see. When that's going to happen again,

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Speaker 1: you know, it could be in six months, could be

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Speaker 1: in the year. But fifty dollar oil is not sustainable

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Speaker 1: because the longer we stay at fifty dollar, the more

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Speaker 1: decline we're going to see, and the bigger the upside

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Speaker 1: after that, when the market gets back into balance, we

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Speaker 1: are going to see a surgeon or prices, which I

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Speaker 1: do not want to see because we'll create the same

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Speaker 1: cycle again and we really don't need that. So, you know,

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Speaker 1: slow increase in oil prices over the next six or

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Speaker 1: twelve months will get us the sixty hour and that

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Speaker 1: will be a sustainable level. It sounds pretty good for

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Speaker 1: the global economy. As someone who's watched um the world

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Speaker 1: and markets and geopolitics for so long, what do you

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Speaker 1: make of this decision? Is this the end of the

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Speaker 1: EU as we know it? I was in Europe actually

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Speaker 1: for a few weeks in the last couple of months,

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Speaker 1: and I can tell you most of the people that

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Speaker 1: I talked to in London especially, they were not very

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Speaker 1: happy at always being members of the European Union. And

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Speaker 1: you're complain about you know, people coming in, you know,

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Speaker 1: raising real estate prices, making life more difficult, competing with

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Speaker 1: them for the same jobs and things like that. So

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Speaker 1: these are you know, part of nationalism that unfortunately is

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Speaker 1: going throughout the whole world. Okay, thank you so very

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Speaker 1: much for joining us for an Oppenheimer and Coal working

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Speaker 1: as oil and gas analysts are special. Extended Brexit coverage

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Speaker 1: continues right here on Taking Stock on Bloomberg Radio. Taking

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