1 00:00:04,000 --> 00:00:08,600 Speaker 1: Broadcasting live to New York Bloomberg eleventh to Washington, d C. 2 00:00:08,800 --> 00:00:14,040 Speaker 1: Bloomberg to Boston, Bloomberg twelve hundred to San Francisco Bloomberg 3 00:00:14,160 --> 00:00:18,000 Speaker 1: nine to the country ju Exam Channel one nine and 4 00:00:18,120 --> 00:00:21,640 Speaker 1: around the globe the Bloomberg Radio plus appen Bloomberg Got 5 00:00:21,640 --> 00:00:27,640 Speaker 1: Gone is taking stock. I'm Kathleen Hayes along with Pim Fox. 6 00:00:28,160 --> 00:00:32,519 Speaker 1: An apparent agreement at Opek to curtail production has been 7 00:00:32,560 --> 00:00:35,920 Speaker 1: responded to in markets around the world, not the least 8 00:00:35,960 --> 00:00:38,199 Speaker 1: of which because it could mean higher oil prices that 9 00:00:38,240 --> 00:00:40,920 Speaker 1: could boost inflation, that could help central banks like the 10 00:00:40,960 --> 00:00:43,960 Speaker 1: Bankage of Campan. We're gonna be speaking to John Kilda 11 00:00:44,080 --> 00:00:46,600 Speaker 1: from again Capital. Guess we'll be speaking about the price 12 00:00:46,640 --> 00:00:49,040 Speaker 1: of oil and what happens next. But right now we 13 00:00:49,080 --> 00:00:51,120 Speaker 1: know what happens next. We're going to Charlie Pellett in 14 00:00:51,120 --> 00:00:54,440 Speaker 1: the Bloomberg newsroom, and I think very much Pim Fox, 15 00:00:54,440 --> 00:00:56,920 Speaker 1: thank you, Kathleen Hayes. Let us begin with crude oil, 16 00:00:57,000 --> 00:00:59,520 Speaker 1: because we have got oil at a one month high. 17 00:00:59,520 --> 00:01:02,000 Speaker 1: After all, Peck agreed to reduce production for the first 18 00:01:02,040 --> 00:01:06,320 Speaker 1: time in eight years, surprising traders a big shock. Yesterday. 19 00:01:06,360 --> 00:01:09,480 Speaker 1: They were expecting members to maintain output. Here's where we 20 00:01:09,520 --> 00:01:13,160 Speaker 1: stand in terms of crude. West Texas Intermediate up one 21 00:01:13,480 --> 00:01:16,480 Speaker 1: two percent right now, up fifty six cents w t 22 00:01:16,720 --> 00:01:20,319 Speaker 1: I for sixty of barrel. Brent crude up six tenths 23 00:01:20,319 --> 00:01:22,399 Speaker 1: of one percent hard by twenty nine cents of barrel 24 00:01:22,440 --> 00:01:26,440 Speaker 1: for ninety eight right now on Brent stocks following banks 25 00:01:26,520 --> 00:01:30,040 Speaker 1: are retreating amid growing concern that Deutsche banks woes will 26 00:01:30,080 --> 00:01:33,119 Speaker 1: spread to the global financial sector, a topic we were 27 00:01:33,200 --> 00:01:36,840 Speaker 1: just discussing right here on Bloomberg. Shares of Deutsche Bank. 28 00:01:36,840 --> 00:01:41,360 Speaker 1: They're down now by six point nine percent. Bloomberg Exclusive. 29 00:01:41,440 --> 00:01:44,280 Speaker 1: This morning, Bloomberg Radio and Television sat down with US 30 00:01:44,360 --> 00:01:48,680 Speaker 1: Treasury Secretary Jack lou in Mexico City. U S Mexico 31 00:01:48,760 --> 00:01:52,360 Speaker 1: relationship is very important. It's important as an economic relationship. 32 00:01:52,400 --> 00:01:56,120 Speaker 1: It's important as a security relationship in the region. The 33 00:01:56,200 --> 00:01:59,160 Speaker 1: US relationship with the Western hemisphere for our entire history 34 00:01:59,160 --> 00:02:03,320 Speaker 1: has been central to our sense of our security interests 35 00:02:03,360 --> 00:02:07,840 Speaker 1: and our economic interests. More positive views unemployment, The Laborty 36 00:02:07,840 --> 00:02:10,880 Speaker 1: Department said jobless claims did rise last week by three 37 00:02:10,880 --> 00:02:13,919 Speaker 1: thousand to two hundred fifty four thousand, that estimates were 38 00:02:13,960 --> 00:02:18,000 Speaker 1: for an advance up to two hundred sixty thousand gold 39 00:02:18,280 --> 00:02:21,000 Speaker 1: up to thirty ounce. The thirteen twenty one again there 40 00:02:21,040 --> 00:02:23,480 Speaker 1: of two tenths of one percent. The ten year up 41 00:02:23,560 --> 00:02:25,920 Speaker 1: five thirty seconds with the yield of one point five 42 00:02:26,000 --> 00:02:29,959 Speaker 1: five percent. Costco reports after the closing bell Costco shares 43 00:02:30,040 --> 00:02:33,519 Speaker 1: trading Laura now by one point two percent, again recapping 44 00:02:33,600 --> 00:02:36,320 Speaker 1: equities lower twenty eight minutes to go ahead of the close, 45 00:02:36,440 --> 00:02:39,239 Speaker 1: the SMP down fifteen, a drop of seven tenths of 46 00:02:39,360 --> 00:02:43,320 Speaker 1: one percent, and right now thirty two on Wall Street 47 00:02:43,360 --> 00:02:45,840 Speaker 1: to look at the other stories. Thank you, Charlie from 48 00:02:45,840 --> 00:02:48,760 Speaker 1: the Bloomberg Newsroom. I'm Jill Schneider. This news update is 49 00:02:48,760 --> 00:02:51,160 Speaker 1: brought to you by the Jeep Grand Cherokee, the most 50 00:02:51,200 --> 00:02:54,760 Speaker 1: awarded suv ever. The Grand Cherokee continues to raise the 51 00:02:54,840 --> 00:02:59,000 Speaker 1: bar with its luxurious interior and legendary four by four capability. 52 00:02:59,400 --> 00:03:02,639 Speaker 1: Drive one your local Jeep dealer today. A rush hour 53 00:03:02,720 --> 00:03:05,680 Speaker 1: commuter train traveling at a high rate of speed, crashed 54 00:03:05,720 --> 00:03:08,280 Speaker 1: through a barrier at the busy Hoboken station this morning, 55 00:03:08,600 --> 00:03:11,200 Speaker 1: killing one person and injuring more than one hundred others. 56 00:03:11,520 --> 00:03:14,600 Speaker 1: That's according to Jersey Governor Chris Christie, who briefed the 57 00:03:14,720 --> 00:03:17,399 Speaker 1: media along with New York Governor Andrew Cuomo a short 58 00:03:17,480 --> 00:03:20,880 Speaker 1: time ago. New Jersey Transit employee Michael Larson was about 59 00:03:20,960 --> 00:03:25,720 Speaker 1: thirty feet away and saw the accident unfolding at speed. 60 00:03:26,200 --> 00:03:30,960 Speaker 1: It went over to block basically through the air, traveled 61 00:03:30,960 --> 00:03:34,880 Speaker 1: about another came to arrest when it went hit the 62 00:03:34,920 --> 00:03:38,400 Speaker 1: wall of Luke Pomo was sitting on another train and 63 00:03:38,520 --> 00:03:43,680 Speaker 1: also saw the crash happen. All these metal on the 64 00:03:43,760 --> 00:03:47,960 Speaker 1: ground and hips, furst and waterflown everywhere. The National Transportation 65 00:03:48,000 --> 00:03:52,080 Speaker 1: Safety Board is investigating. India has retaliated for a deadly 66 00:03:52,160 --> 00:03:55,680 Speaker 1: strike against its soldiers. Bloomberg's Michael Barr has more. India 67 00:03:55,800 --> 00:03:58,920 Speaker 1: has hit back after an attack on Indian soldiers earlier 68 00:03:59,000 --> 00:04:01,600 Speaker 1: this month. In the has says it has attacked terrorist 69 00:04:01,680 --> 00:04:05,240 Speaker 1: camps just across the border in Pakistan. According to India's 70 00:04:05,280 --> 00:04:09,920 Speaker 1: Director General the Military Operations, heavy casualties were inflicted on militants. 71 00:04:10,200 --> 00:04:13,400 Speaker 1: It is the biggest military escalation sent to standoff in nineteen. 72 00:04:14,400 --> 00:04:17,080 Speaker 1: On September eighteenth, an attack on an Indian army camp 73 00:04:17,160 --> 00:04:21,120 Speaker 1: in Cashmere left eighteen soldiers dead. Global News twenty four 74 00:04:21,160 --> 00:04:24,159 Speaker 1: hours a day, powered by More than twenty d journalists 75 00:04:24,360 --> 00:04:28,159 Speaker 1: and analysts in more than one twenty countries. I'm Jill Schneider. 76 00:04:28,360 --> 00:04:32,000 Speaker 1: This is Bloomberg, Charlie, and we thank you, and we're 77 00:04:32,040 --> 00:04:35,880 Speaker 1: brought to you by the American Arbitration Association. Business disputes 78 00:04:35,880 --> 00:04:40,400 Speaker 1: are inevitable, resolve faster with the American Arbitration Association, the 79 00:04:40,480 --> 00:04:44,520 Speaker 1: global leader in alternative dispute resolution for over eighty five years. 80 00:04:45,000 --> 00:04:49,520 Speaker 1: More at eight r dot org recapping equities lower oil higher, 81 00:04:49,720 --> 00:04:52,280 Speaker 1: SMP down fourteen A dropped there of seven tenths of 82 00:04:52,320 --> 00:04:55,560 Speaker 1: one percent. West Texas Intermediate crude up now by one 83 00:04:55,640 --> 00:04:59,440 Speaker 1: point three percent. I'm Charlie Pellett. That's a Bloomberg business flash. 84 00:05:00,400 --> 00:05:03,400 Speaker 1: You're listening to taking stock with Kathleen Hay's and Pim 85 00:05:03,480 --> 00:05:07,400 Speaker 1: Box on Bloomberg Radio. Oh yes, let's talk about oil 86 00:05:07,440 --> 00:05:10,680 Speaker 1: and find out about this new agreement. Will it hold? 87 00:05:10,839 --> 00:05:13,120 Speaker 1: Let's find out more from John killed Off he is 88 00:05:13,200 --> 00:05:18,640 Speaker 1: founding partner again a capital John, this opeque agreement. Just 89 00:05:18,880 --> 00:05:22,720 Speaker 1: explain it to us. Iran doesn't actually have to observe 90 00:05:22,880 --> 00:05:26,440 Speaker 1: the new caps well, that the devil is in the 91 00:05:26,520 --> 00:05:29,800 Speaker 1: details and we haven't necessarily met the devil yet because 92 00:05:29,960 --> 00:05:33,000 Speaker 1: we won't know the quota table until they get together 93 00:05:33,120 --> 00:05:36,840 Speaker 1: on November. So there are stories swirling that they'll be 94 00:05:36,920 --> 00:05:41,480 Speaker 1: exemptions for Iran, Nigeria and Libya because of the outages 95 00:05:41,520 --> 00:05:45,320 Speaker 1: they suffered and because of the Ran sanctions regime that 96 00:05:45,720 --> 00:05:49,320 Speaker 1: just getting out of. So um. It looks like the 97 00:05:49,360 --> 00:05:51,640 Speaker 1: Saudis are going to have to bear almost fully the 98 00:05:51,720 --> 00:05:53,480 Speaker 1: production cut. We don't know if they're going to be 99 00:05:53,600 --> 00:05:57,080 Speaker 1: up for that. And also too before they announced their 100 00:05:57,120 --> 00:06:00,360 Speaker 1: table of production limits, they're looking to read chat to 101 00:06:00,440 --> 00:06:03,720 Speaker 1: an open producers such as Russia, and Russia has just 102 00:06:03,920 --> 00:06:08,520 Speaker 1: been going, uh like gangbusters, increasing their production. There was 103 00:06:08,560 --> 00:06:10,440 Speaker 1: a great story on the Bloomberg. You guys have been 104 00:06:10,480 --> 00:06:13,880 Speaker 1: covering this extremely well. Just last month they raised production 105 00:06:14,200 --> 00:06:17,240 Speaker 1: four hundred thousand barrels a month on month. So there's 106 00:06:17,240 --> 00:06:19,520 Speaker 1: a lot of work to be done here. Of course, 107 00:06:19,560 --> 00:06:21,760 Speaker 1: it was Saudi Arabia a couple of years ago adopted 108 00:06:21,800 --> 00:06:24,360 Speaker 1: a policy of just you know, helping to flood the 109 00:06:24,360 --> 00:06:26,720 Speaker 1: world with oil. You know, push the price low enough, 110 00:06:26,800 --> 00:06:28,720 Speaker 1: you'll you'll push out a lot of the marginal producers, 111 00:06:28,920 --> 00:06:31,280 Speaker 1: you know, shell producers in the States, for example. That 112 00:06:31,400 --> 00:06:33,360 Speaker 1: worked to an extent, but now fully and of course 113 00:06:33,480 --> 00:06:36,280 Speaker 1: some might say it. You know, it was a they 114 00:06:36,320 --> 00:06:39,640 Speaker 1: shot themselves in their own foot. Uh do you know 115 00:06:39,680 --> 00:06:43,920 Speaker 1: anything about the inner conversations? What's what's the chatter in 116 00:06:44,360 --> 00:06:48,320 Speaker 1: in the energy market among oil experts like you about 117 00:06:48,960 --> 00:06:51,760 Speaker 1: what Saudi Arabia is thinking? Now, this is a big mistake, 118 00:06:51,880 --> 00:06:53,880 Speaker 1: has gone far enough? What? What? What do you think? 119 00:06:53,960 --> 00:06:56,560 Speaker 1: This is the strength of the argument that this is 120 00:06:56,640 --> 00:07:00,400 Speaker 1: totally blown up in their face. UM and Iran emerging 121 00:07:00,520 --> 00:07:04,240 Speaker 1: from this as the strongest player UH in OPEC. UH 122 00:07:04,480 --> 00:07:09,000 Speaker 1: sociaty financial position has deteriorated very rapidly to having to 123 00:07:09,040 --> 00:07:12,240 Speaker 1: go to market to raise debt and the I p O, 124 00:07:12,400 --> 00:07:16,880 Speaker 1: the Saudi Aramco Crown Jewel and they're they're not paying suppliers, 125 00:07:16,960 --> 00:07:20,640 Speaker 1: they're they're not giving out raises, they're not giving out bonuses. Uh. 126 00:07:20,800 --> 00:07:23,119 Speaker 1: They've hit the end of the road much more quickly 127 00:07:23,160 --> 00:07:25,600 Speaker 1: than I think they realized. And I also don't think 128 00:07:25,600 --> 00:07:27,680 Speaker 1: they'd be sitting here two and a half years later 129 00:07:27,960 --> 00:07:29,720 Speaker 1: when they embarked on this. I think they thought they 130 00:07:29,760 --> 00:07:31,800 Speaker 1: were gonna be able to wash out the U S 131 00:07:31,840 --> 00:07:35,200 Speaker 1: shale industry much more effectively and also break the back 132 00:07:35,280 --> 00:07:38,160 Speaker 1: of others with an OPEC so this has gone really 133 00:07:38,240 --> 00:07:41,040 Speaker 1: off the rails for them. It's an embarrassment really and 134 00:07:41,320 --> 00:07:43,160 Speaker 1: uh and that the position that I Ran is it 135 00:07:43,280 --> 00:07:45,960 Speaker 1: is quite interesting because because of the way they hunker 136 00:07:46,080 --> 00:07:49,000 Speaker 1: down to ride out the sanctions, regime set them up 137 00:07:49,040 --> 00:07:52,120 Speaker 1: beautifully for these tough times. So their economy is actually 138 00:07:52,160 --> 00:07:55,400 Speaker 1: growing four percent, while all the other oil based economies 139 00:07:55,440 --> 00:07:58,840 Speaker 1: are in significant contraction. So John Kildeff, I want to 140 00:07:58,880 --> 00:08:01,280 Speaker 1: try to understand what's going on behind the scenes here. 141 00:08:01,400 --> 00:08:05,400 Speaker 1: Iran will pump more oil and then they'll spend some 142 00:08:05,600 --> 00:08:09,680 Speaker 1: of that money to back the Bashar al Assad regime 143 00:08:09,960 --> 00:08:14,560 Speaker 1: in Syria, while the Saudis will pump their oil and 144 00:08:14,920 --> 00:08:18,960 Speaker 1: they will continue to use that money to support the 145 00:08:19,120 --> 00:08:22,880 Speaker 1: rebels who are fighting the bush are Al Assad regime, 146 00:08:23,360 --> 00:08:26,160 Speaker 1: and Russia will continue to pump oil and spend that 147 00:08:26,320 --> 00:08:29,760 Speaker 1: money fighting the rebels on behalf of the bush are 148 00:08:29,800 --> 00:08:33,679 Speaker 1: Al Assad regime. Does that make sense absolutely? It's the 149 00:08:33,760 --> 00:08:35,599 Speaker 1: extent you see Russia on the same side of this. 150 00:08:36,240 --> 00:08:38,480 Speaker 1: You're not going to get any really hard agreement in 151 00:08:38,559 --> 00:08:41,360 Speaker 1: a way now a land has turned the table on 152 00:08:41,440 --> 00:08:44,000 Speaker 1: the Saudis and that they're able to keep the price low, 153 00:08:44,360 --> 00:08:47,760 Speaker 1: still make money, still cover their budget same with the Russians. 154 00:08:47,800 --> 00:08:50,760 Speaker 1: The Russians are now budgeting for four to five dollar oil. Uh, 155 00:08:50,920 --> 00:08:53,679 Speaker 1: so they too can can ride this out. And it's 156 00:08:53,760 --> 00:08:56,719 Speaker 1: the Saudis who cannot ride this out, who needs a 157 00:08:56,840 --> 00:08:59,880 Speaker 1: higher price to really keep things together, and so far 158 00:09:00,000 --> 00:09:02,240 Speaker 1: their side of that fight. So they're going to have 159 00:09:02,320 --> 00:09:05,000 Speaker 1: the least resources of the salities to help with the rebels. 160 00:09:05,120 --> 00:09:06,880 Speaker 1: And so I think that's why you're seeing a very 161 00:09:06,920 --> 00:09:11,160 Speaker 1: well timed ratcheting up, unfortunately of the bombing of Aleppo 162 00:09:11,320 --> 00:09:16,640 Speaker 1: and other parts of Syria. So what is your forecast 163 00:09:16,840 --> 00:09:20,000 Speaker 1: for the price of oil? Now? Where's it going? Well? 164 00:09:20,000 --> 00:09:21,640 Speaker 1: I think it's it's still going to go lower. I 165 00:09:21,679 --> 00:09:24,400 Speaker 1: think what you've seen here is is the short covering rally. 166 00:09:24,440 --> 00:09:26,520 Speaker 1: I think a lot of folks have gotten scared out 167 00:09:26,600 --> 00:09:29,120 Speaker 1: because of the at least came to an agreement OPEC 168 00:09:29,200 --> 00:09:31,679 Speaker 1: that is, but it's short lives. The fact that we 169 00:09:31,720 --> 00:09:34,679 Speaker 1: didn't get over forty eight dollars a barrel today UH 170 00:09:35,040 --> 00:09:38,280 Speaker 1: set us up for another technical failure here, So prices 171 00:09:38,320 --> 00:09:40,880 Speaker 1: should trend down. I think we go below forty before 172 00:09:40,920 --> 00:09:43,240 Speaker 1: we go anywhere else. I don't see the market coming 173 00:09:43,280 --> 00:09:47,120 Speaker 1: into balance until late next year. Uh. Particularly with the 174 00:09:47,200 --> 00:09:49,520 Speaker 1: increased production that we're going to get from from the 175 00:09:49,559 --> 00:09:52,439 Speaker 1: SEC countries we mentioned Russia, O, Libyan, Nigeria, and even 176 00:09:52,480 --> 00:09:54,160 Speaker 1: Iraq and Iran for that matter. By the way, the 177 00:09:54,400 --> 00:09:57,280 Speaker 1: Iraqis are screaming over the d L are very upset 178 00:09:57,280 --> 00:09:59,320 Speaker 1: about it because it looks like they're supposed to take 179 00:09:59,360 --> 00:10:03,040 Speaker 1: a big hit on their recent production hike as well. John, 180 00:10:03,160 --> 00:10:05,600 Speaker 1: just quickly give you about thirty seconds tell us about 181 00:10:05,640 --> 00:10:09,080 Speaker 1: the importance and the change that having the US as 182 00:10:09,120 --> 00:10:13,199 Speaker 1: a swing oil producer makes to the market. Well, I 183 00:10:13,280 --> 00:10:14,839 Speaker 1: know there's a big debate as to whether or not 184 00:10:14,960 --> 00:10:17,880 Speaker 1: we are or can be energy independent. UH was certainly 185 00:10:17,920 --> 00:10:22,720 Speaker 1: an energy player. I you know, this has been a miracle. UH. 186 00:10:22,840 --> 00:10:26,400 Speaker 1: And the technology and advancements keep coming. They keep sleep 187 00:10:26,440 --> 00:10:30,120 Speaker 1: the frackers, the shale players keep reducing their costs of drilling. 188 00:10:30,400 --> 00:10:32,719 Speaker 1: They are back in the game, and I think it's 189 00:10:32,920 --> 00:10:36,400 Speaker 1: it's an amazing story that's gonna continue to help profitable economy. 190 00:10:37,240 --> 00:10:39,360 Speaker 1: John killed us, thank you so very much for joining 191 00:10:39,400 --> 00:10:43,520 Speaker 1: us today founding partner of Again Capital. Yes, there seems 192 00:10:43,559 --> 00:10:46,000 Speaker 1: to be some kind of deal led by Saudi Arabia 193 00:10:46,000 --> 00:10:48,480 Speaker 1: in OPEC to cut back on production. But John says 194 00:10:48,520 --> 00:10:51,880 Speaker 1: prices are going to keep falling anyway. I'm Kathleen Hayes 195 00:10:51,880 --> 00:11:02,320 Speaker 1: along with pim Fox, and this is Bloomberg. Coming up 196 00:11:02,360 --> 00:11:05,840 Speaker 1: on taking stock. We're gonna hear from Peter Cheer Breen Capital, 197 00:11:05,920 --> 00:11:09,760 Speaker 1: find out about winning and losing trades. Also talk about 198 00:11:09,840 --> 00:11:13,000 Speaker 1: Deutsche Bank that shares it down six and a half percent. 199 00:11:13,320 --> 00:11:14,359 Speaker 1: This is Bloomberg.