still on the show, opec entry. us they minister tells could join the cartel but not before 2019. >> a big day for saudi arabia. we have details next. this is bloomberg. ♪ poker >> this is bloomberg markets. quick, i'm manus cranny. >> thank you. volkswagen agreed to settle a lawsuit over marketing and clean emissions. claims the company deceived for him to read as differently than when they perform on the road. worth about $9 billion. and giving up control of the management business which looks following6 million allegations of money and the health care fund has been misused. halting commitments for capital organization complete. that is your bloomberg business flash. let's talk about saudi arabia. they will find out next month if it will be included in the index for emerging-market countries. they said back in september they would soon meet the criteria to be promoted from unclassified to a secondary market. inclusion would help saudi arabia attract more money from foreign investment. we will bring in someone fr

the implementation of the supply adjustment by both opec and non-opec at a record conformity level of over 100% had shrunk this glut by over 200 million barrels. now we are hovering around 100 million over an above the five-year average. even i agree we have already achieved our objectives because of our changes on the baseline now, what's happened last week in the equity markets and the financial markets, of course they did effect all the commodities, but you can see it's just a blip and it's expected so the fundamentals are so strong we do not expect any hiccup along the way similar to what we had or we saw last year because of this factor >> finally no concerns about appetite from some of the big domestic russian players and others about wanting to be let off the leash and produce more barrels? you think the kremlin and mr. novak will keep them in check? >> i have and received assureses both from mr. alexander novak and president putin that they will remain committed to the op opec/non-opec declaration. and they have proved this through the high level of conformity to their supply

it is opec and non-opec alliance. this group of responsible producers have delivered and over delivered on their promise for the year 2017. myself and ther secretariat is to try to draft a charter of how are we going to continue working together for the sake of better economic growth of the world and for the sake of ensuring that we have adequate supply to the world demand and oil? as you know, we are moving rapidly to the delivery of 100 million barrel demand per day. there are very limited areas where we can see that supply to come. as well, we have some declining oil fields that need replacement. there are many issues to the supply side as there are issues on the demand side as well. tomsuhail mohamed: annmarie: venezuela says cooperation for five years. suhail mohamed: my hope is for it to last forever. annmarie: do you think russia could join opec? suhail mohamed: i would not call just a country. i the group together are making a contribution to the supply and demand balance and it's a critical command to the gro

you look at the opec report and we have and not opec increase $1.4 billion a day. that is not enough to fulfill all of the incremental demand that opec this year around $1.6 million a day. that is the global increase in demand so far stronger than what shale oil in the u.s. is going -- yound that is what need to stay long in the oil market that really takes a lot of the fact that you have economic woes. alix: big banks say goodbye because of that demand and it really needs to shake through. thank you so much, javier blas. terry simpson is still with us from blackrock. let's take a look at the energy space. oil price is now $54 a we see the high-yield's coming in, 6.4%. it feels like we saw a bit of a shakeup but compared to 2016, nothing. terry: basically the fundamentals of the oil market are very strong. wti as wellucture, as brent they still remain intact. that is significant for the fundamentals but in the short-term, you can have these kind of big tactical swings. we could try and explain it with a stronger dollar has week -- higher dollar and -- strong dollar

soil production and why that's making life more difficult for opec. now there been an eerie sense of calm where the markets had been concerned all of last year but this week everything changed and we saw a brutal sell off in global stocks which accelerated as the week got underway on monday and tuesday stocks fell dramatically around the world to raising all of twenty eight hundred gains in a matter of hours and then they recovered and have been pretty volatile since so what just happened while the prospect of higher interest rates across the globe was the main reason given by analysts for the market rout the world economy is just emerging from a period of record low lending rates and in some cases negative interest rates all designed to kickstart the economy nearly a decade of easy monetary policy has sent asset prices sky high now that's likely to end things like stocks bonds commodities and currencies are going to have to adjust to joining us now from london is david madden a market analyst at c.m.c. markets good to have you with us david so the ge

and non-opec is trying to maintain? >> it creates it was in this quarter, as well. looking from the fast-moving data we have with respect to supply and demand, most of it comes out of the net estate. we are talking in q1 2018 over a million barrels a day of supply growth. the iea is projecting that kind of supply growth from the united states for all of 2018. the last time we had that level of growth of supply from the u.s. was back around 2013. you're being matched by demand. we are not in that kind of scenario where demand is doing ok but it is not looking too hot or fast. united states could really overwhelm and swamp any of the incremental demand that is coming out of the market this year. yousef: are we going to see a response that happens from opec? can they do anything more this point? backed themselves into the wall to try to manage the market by cutting back on production and targeting the inventories. that have been successful for the past six months of 2017. there was no embellishments -- there was an acknowl

presence with the opec and non-opec was important. and we will continue to participate as observers and i think the day will, and my fellow colleagues, the ministers of opec, especially this year, now the president, and his excellency, is really after having egypt as a member in the opec are in a station which is something we are very happy to have happen. we will see how it goes. we are very interested. >> you would be open to joining? min. el-molla: the day will definitely happen but we cannot tell when. >> you would be a member of opec. would you be a part of the cooperation framework they are talking about, the supergroup? min. el-molla: this is the minimum that we could have but so far, we have been part of the a sign ofnd we signed solidarity and agreement with the accord. we stand together with the organization. and we are looking into how we would join the forum. cooperationould be and maximum would be joining. you can see that happening in 2018? min. el-molla: i don't think so. we have a significant production . the other sid

that's according to opec sentiments. themberg has been told that recovery in oil prices since last year's reduction is breathing life back into projects that had been put on the back burner. greg had we do it, 60, 70 and we are very disciplined. i believe we accelerate the culture. and the profound words of english history could come back to haunt them. the dotcom bubble indicates that expandptocurrency could to 19%. the boe strategist says looking at this spectacular rival, the nasdaq as well at the start of the century, bitcoin could plummet to just $900. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. haslinda: let's get back to one of our top stories. president trump has unveiled a $4.4 trillion budget for fiscal 2019, calling for higher spending on the military. in a massive upgrade to the nation's nuclear capabilities. are increasing arsenals with virtually every weapon. we are modernizing and grading a a brand-new nuclear force. we are going to be s

russia as well as opec. we will continue our chat on oil and what is ahead for energy companies in asia. stay with us. this is bloomberg. ♪ ramy: this is "daybreak asia." i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. we are discussing oil prospects with jeff brown. let's bring in bloomberg intelligence senior analyst -- oil prices are much stronger these days. >> with oil prices being around $70 per barrel, it seems like it's a very good it i think it will be a divergence happening. you will see him he's doing really well this year, and refiners in petrochemicals struggling because oil is an import cost for them. refiners would be doing well. look at oil prices, even despite the correction the last couple of weeks, you have seen about 25% average increase. rising -- emp's rising if oil prices remain where they are. yvonne: in terms of valuation, do you think the space still looks attractive? kunal: it is relatively extensive across the board, but if you break it down to the month o

think you're absolutely correct so for the last just over a year through two thousand and seventeen opec has been restrained in their production by around one point eight million barrels per day to try and reduce supply and drop inventions and bring your market back into balance the directed increase in production from the united states is bringing more oil on to the market and although opec's move has been very successful so far we expect all inventions to to stop declining now through two thousand and eighteen and to actually start rising again presumably because of the rapid increase in production from the united states so what that will do we think is it will encourage opec to to keep their supply restrained in place for longer because if they if they were to relax that then they'd inventions would climb even faster and so overall more oil and so a suppression of price effect right producers. spencer welsh oil analyst at i.h.s. market thank you. now when his weight is cryptocurrency the petro is just a day old but the country socialist leaders are already claiming a big success sayin

than there is being taken up by opec. essentially, we do have are in the midst of the correction will stop last week for the year-to-date high is just around the mid-60's, looking now at the new rage. the paired of has changed over the last three years. we were essentially looking at a market that was found between the mid-50's and the high-end to the mid-40's on the low end. i will venture we have moved $10 higher now going through to the new year. that is to say the high the market is looking around to be in the xts. below in the market, well, if the previous resistance was in the mid 50's, then today support would be in the mid 50's. we're looking at a market likely mid 60's mid-50's to in the new year. francine: how is that driven by dollars? the weaker dollar drove oil advance january, but it rebounded a touch. >> absolutely. the dollar is extremely important. a very strong correlation between an inverse relationship between the dollar given that the dollar is the world's invoicing currency. we've had a lot of issues

so a weak dollar to opec or to russia is very upsetting, because you get paid in those dollars. if you keep the dollar weak you have no incentive to put more oil out into the market. therefore to try to keep prices higher watch the dollar the federal reserve and u.s. treasury department will have just as much of an impact on the direction of oil as will opec. >> a weaker dollar, rising shale output what is your long-term forecast for oil? right now we're pushing the envelope over the past five years, wti or oil prices have traded between two clusters, between 35 and 65. now we're at the top of that cluster. the next cluster was between $95 and $115 more or less. so right now overthe past five years we haven't been in the middle of that range that's not to say we can't go higher what's interesting is that the producer, the only person who is naturally long oil in this market and who has to sell it never sold more oil forward an we'll continue to see production rise because they have sold a lot of oil that they need to produce to offset contracts. we also have a strong relationshi

-non-opec deal over tightening the market? honestly, there is a small possibility that could happen. that does assume that demand is up in the 1.8% this year. it is very early days. suggests it will not quite make the number. theynk the chance that over tighten substantially is ridiculous. yousef: that was the vitol ceo, ian taylor, speaking to manus cranny. we were speaking earlier about leadership positions. mike pence has made a few comments and some remarks, saying it is important to look at market fundamentals and they are "very strong." he also added that the flow of represented the eceb and flow of the stock market. as we are speaking, we have thought coming through from the japanese prime minister speaking of parliament. he says he will grow the implementation of monetary policy. we are still keeping you up to speed with the market action. 4.3msci asia pacific down percent. the nikkei, down 6.6%. the u.s. 10-year, holding steady at 2.65%. and equity futures are close to the 3% mark with the s&p 500. we will talk about

it is absolutely a concern because the way that opec has set the deal is they are just trying to get rid of surplus stock. the marginal cost of production will matter, and that will come out of the u.s.. $65 toes get to around $70, you should see a strong incentive for u.s. shale to come online. it takes about six months to go from rigged deployment to production. that is the risk, it can respond quickly. i guessn that case, through these optics of how u.s. is still basically the swing producer in this market, is it too early for opec to consider what their exit strategy will be? publicink right now in it will not be something they will talk about because the signaling from opec is critical if and how much the credibility of this deal rests upon saudi arabia, russia, iran, where there is a lot of speculation this they not work. public signaling is the deal will last until the end of the year, but they will think about what prices reasonable and are we leaving market share open for the u.s. shale sector. haidi: i want to move on to iron ore. this is a volatile issue at the best of tim

opec says the glut is disappearing. others say it doesn't really because of the machinations of the oil market we have been discussing. thepec says they expect market to balance in q2, but if that were to happen, oil prices would be closer to $100. oil markets are balancing, but if you look at the shale production forecasts, shale production from the u.s. alone will be higher than the demand for global oil demand. that means you would see inventories coming back online and numbers rising and that would pressure oil prices. the market is balancing, but the balancing has slowed down. rishaad: once the balancing act gets completely confused or whatever with shale as well, because of its on and off ability. $65, 80%s true, but at to 90% of shale producers are making money. to bring an incentive back as many rigs as possible. there is a lot of spare capacity to bring back more production online, and that will continue to happen if oil prices remain where they are. rishaad: thank you very much. coming up, the latest on the $2

in opec,e seeing non-opec discussing new ways of measuring inventories. arguably, creating a scenario when you're looking at a much longer period for this agreement between these two groups. all ofr view change at who will win this fight? jaap: not really. we thought the spike to 70 was short-lived. yousef: you could have done with more of that, right? jaap: it would have been nice. for us, it has been a scenario between 50 and 60. 50 is livable. 60 is ideal. if you look at the fiscal breakeven of the gcc, it is 61.nd as long as you are around the 60 levels, you take up a little bit -- you take out a little bit. the reason is pretty decent shape. yousef: that is what the latest bloomberg piece points to. you have saudi arabia the traditionally was a dove in these the liberations. now becoming more hard lined in its policy approach. bc underscoring -- rbc underscoring what you said. we're sticking on the show, have a lot to discuss. incredible conversations coming up. the biggest discounts. why stocks in dubai are cheaper than their counterparts in egypt?

where does that leave opec's production cut? we discuss that next, this is bloomberg. ♪ we use our phones and computers the same way these days. so why do we pay to have a phone connected when we're already paying for internet? shouldn't it all just be one thing? that's why xfinity mobile comes with your internet. you can get 5 lines of talk and text included at no extra cost. so all you pay for is data. choose by the gig or unlimited. and now, get a $200 prepaid card when you buy an iphone. it's a new kind of network designed to save you money. call, visit, or go to xfnitymobile.com. yousef: welcome back to the "best of bloomberg markets middle east." fresh industry data this week shows yet another expansion of u.s. crude and gasoline inventories, undermining efforts by opec and its allies to clear a global glut. however, the iea says the surplus has almost been cleared. i asked hootan yazhari, the head of mena and frontier markets at bank of america merrill lynch, how serious a threat u.s. production is to opec's goals. hoot

there is optimism that opec/non-opec can keep the shares. morgan stanley says the u.s. tariffs will hit china aluminum over steel. .7%.ore up other key asset classes. ahead of the key issuances in the united states, gold. downside pressure, down .4%. through.eakness coming we will expand on that conversation shortly. u.s. 10 year, this is key. we keep crawling towards the 3% mark. treasury yield curve flattening after the u.s. holiday coming back online. s&p 500 futures currently called slightly lower. let's check in on the first word world, toaround the haslinda amin. may'sda: yousef, theresa team with holding of pounds in brexit payments if the e.u. does not give the u.k. the trade deal at once. whilst the move is not the option, it could be necessary in case that you tries to raonic on ge on a trade deal. mark carney says he is already bracing for the you k's rental crisis wealth -- u.k.'s crisis. he is planning for bank failures providing extra liquidity and levels. higher capital carney says accepting the crisis will happen is the best way to prepare for it. the he

over the weekend we had news that there are supergroups are opec, not opec, that are looking for new ways to measure inventory. this sounds like an organization getting ready for another round in what has been a long fight with u.s. shale. jean-paul: if you are not going to bring the shale producers and to that mega group or whatever they want to call it, it does not matter. shale are the new players in the game. if you were not incorporating them into any discussions, i do not think it matters for the long-term. even if you look at the non-gcc oil production targets over the long-term, there are some very aggressive long-term targets in this region. even if you want to have a discussion about what happens with the short-term opec agreement, almost every economy in the region is still looking to oil for their future. that should show you something about what happens beyond 2018 and beyond opec agreements. tracy: what are the risks that countries here in the region start to take their foot off the pedal when it comes to reform? jean-paul: it is a very big risk. if you are concerned ab

where does that leave opec's production cut? we discuss that next, this is bloomberg. ♪ ♪ ♪ show me the olympic winter games ♪ ♪ like i've never seen before. ♪ ♪ xfinity x1, yeah, i always know the scor♪. ♪ triple corks in 4k... lookin' so sick. ♪ ♪ stream live on every screen, every win, every trick. ♪ ♪ 2000 hours of coverage, get your mind blown. ♪ 50 olympic channels, yup, you're in the zone. ♪ ♪ and if there's something that you want to see, ♪ pick up that voice remote and just say "show me..." ♪ experience nbcuniversal's coverage of the olympic winter games like never before with xfinity. proud partner of team usa. retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and c

concerned this could derail opec production cuts. the asian pacific's enjoys a golden year for aviation. we will hear more views from qantas boss, alan joyce. ♪ yvonne: we have been honing in on the fed minutes. i turn in the markets for the close of wall street. asia so far bucking the trend, powering through inflation risk at the moment. china will be the big game changer. g #btv 8423. this coming at a time when the global equities in general, this rebound seeming fragile now. this up spike in yields will be the catalyst of that. now we see that tenure at 2.95%, that will be giving -- the 10 2.95%, that will be giving jitters. betty: as you have mentioned, asia bucking the trend. this connection among global markets between the u.s. and asia, of course continues. ith this tumble in the u.s., will be interesting to see how much carries over into the trading week. yvonne: let's look at the open in korea and japan. >> jitters we saw on wall street. the nikkei 225 losing 0.8%. a firmer yen feeding into the risk off a move. the yen ri

in terms of bond numbers, we have opec supply and u.s. supply balancing the global demand outlook with a pretty much perfectly balanced market for this year. this beckons the question, as are start getting into the end of the year, what is going to have to happen with the opec and of the russian deal, and how are they going to adjust themselves out of it? to bringo doubt going excess volatility, positioning and again is going to be important at that point, and we will have to see exactly what they have in mind and what their plans are for the markets at that stage. just quickly, we are seeing reluctance to talk about any exit strategy at this point. the most important factor to bear in mind for the market is that they need to know, and the market needs to understand that opec and russia are managing the market. it is not like the end of 2014 and 2015 at there was no one in the driving seat. that is a compassing factor. a $60 or happy with $70 price range. that seems to be a range of the are probably going to look to sort of subtle the mar

where does that leave opec's production cut? we discuss that next, this is bloomberg. ♪ yousef: welcome back to the "best of bloomberg markets: middle east." fresh industry data this week shows yet another expansion of u.s. crude and gasoline inventories, undermining efforts by opec and its allies to clear a global glut. however, the iea says the surplus has almost been cleared. i asked hootan yazhari, the head of mena and frontier markets at bank of america merrill lynch, how serious a threat u.s. production is to opec's goals. hootan: global production has been stalling, ex-u.s. we have seen decline rates accelerating in 2016, decline rates were at 5% in 2017, 5.4%. -- 5%. in 2017, 5.4%. so really the big question right now is, what happens outside of the u.s.? because the u.s. is clearly expanding supply a lot more than the market was expecting, especially the data last week showed the more than 300,000 barrel a day increase in production. and looking forward from here, i think the biggest questions really focus around what

guest: talks have started between opec and non-opec. those higher prices will induce much higher production from the united states and also several other places. reporter: do you think opec should then exit the deal earlier? guest: it is up to them to make their able decisions, but one the match ishink es, and the second half is reaction to the united states , but also canada and brazil. we are seeing significant non-opec oil coming into the markets. reporter: do you think oil is sustainable above $60 a barrel? guest: there is no problem in terms of the production growth .nd demand numbers oil demand is still growing. i don't see any major difficulties. reporter: the zinc prices would go higher, $70 or higher -- do you think prices would go higher, $70 or higher? guest: i cannot speak to that, but there is a lot of oil to come to the markets, especially canadaazil and mexico, and middle east countries. we don't have a problem of supply today. reporter: you said earlier the silent shale revolution isn't so silent anymore. could opec bene

this talking about the fact that the institutionalization of this group between opec and non-opec -- that will be a big topic this we will beusly speaking to bob dudley. the strength of the yen is one of the big drivers in terms of the bond market. let's get that strengthening currency. -- as the europe, next european federal bank vice president. the decision puts spain back on the executive board after a six-year hiatus, coming at a crucial time for the ecb as it prepares to unwind unprecedented monetary stimulus after a decade of controversial decisions. through,anish went pledging to defend the independence of the ecb. but this is from a politician this time and that makes me very an easy. >> well, you are not the only one, manus. they are very aware that the , hele who don't like this is now sitting as a central banker where he is supposed to be independent from any kind of political interference. he set up the end of the day you have to set monetary policy for the entire euro area. we understand moving any conflicts of interest in the coming days, we don't know exactly whether i

this as investors are looking at opec production cuts, plus u.s. inventories that continue to decline. putting it a bit under crude oil. let's see what the technical suggests could be next. the big crudehad crash in oil. this is following the crash. this is the recovery that we see, a slow rise higher for oil. lots of volatility. oil may be up over 30% in the last six months, but it is on pace for its worst month since august of last year. what does this chart suggest is next? a trading range right at the top with sellers saying it's pretty reliable. this chart may suggest that oil could in fact drop back down towards 50, maybe even below. it will be interesting to see if that happens. it could suggest, in turn, if the sellers takeover, the fundamentals could prove to be bullish. let's bring in michael rourke. mike, thanks so much for taking the time. oil, everybody is talking about inventories and opec, but what about u.s. production? mike: it has hit record highs. that's a big story here. those are the production cuts that opec made to work off t

at the margin, do you think that opec-non-opec might have over tightened the market in any way? they have been incredibly successful with complaints -- compliance. weeks andthe last few months we have seen oil flirting towards $70 per barrel. i would argue that that is not necessarily sustainable. i don't think global demand, even in this global synchronized upswing, where not talking about global growth numbers that are outlandish relative to history. we are incredibly cut isn't of the fact that we are trying to become more energy efficient -- incredibly cognizant of the fact that we are to become more energy efficient globally. over the next few years we would expect us bank less oil -- us being less oil intensive. i think there are some speculative longs in there. those producers in the united states, how vulnerable are they if we get rates going up in the u.s? colleaguessure my would be much more aware of individual companies at risk. biould observe that the s's. james, thank you very much. is the senior investment manager at aberdeen asset management. u.s. futures are dippi

thank you for joining me today you're in the hot seat that i'm usually in opec saying yesterday that it's achieved full compliance with its aim of cutting back on supply is that something you can expect to continue throughout the course of the rest of this year? is this something we'll have to check in on every month? >> we'll have to check in a bit on countries like iraq by in large, opec countries have been better than expected, and saudi arabia is so firmly committed to this deal and doing whatever it takes to rebalance the market, to firm the floor for prices and then you have countries that you would think of ascheaters le venezuela. venezuela is the most come mrichbt cou compliant country in opec, because that's because of problems there >> does venezuela remain the key geopolitical factor to be watching there, and if things improve there could oil prices come under pressure? >> the real question is how fast could venezuela fail there's no indication that vchbz venezue venezuela will get their act together quickly the u.s. is preparing additional energy sanctions on the country

shale will not present a threat to opec's cane. >> miggy is opec is raising his demand cost. --you have to remember that opec is raising its demand cost. demand is meetings apply at some point. it is very confident in the rebalancing story. and you mentioned part of this earlier. headline price at $60, but around the quarterly price, it is averaging around $60 barrel and that is the highest since 2014. haslinda: opec is sticking to a story. then the rebalance and the market seems to like it at the moment. >> on the down low, people's attention for the bottom of the curve. haslinda: -- david: for obvious reasons, we need to understand about the demand story side of the equation. they rated that and they said because of that, we do not have to worry about shale. >> absolutely, and you are seeing the demand from key places around the world, china is one of them. economiesent, global seem to be adjusting and adjusting well. and that is fitting demand. that better demand will make that better supply. obviously, opec does not want to give up too much market shares for u.s. shale bu

even opec said there is going to be shale. we didn't speak to some ministers and they said that will be enough demand in the market for it to be absorbed by shale. the people are really asking, is opec now the victim of their own success. adirush and sasia and sudi winning too much? much," hm?ning too when we see these headlines, how the market is positioned. annmarie: tug-of-war again. if you look at what the positioning was from money managers last week. he would not have realized that oil went down 10%. there is positioning in the market for hedge funds to be wrong and you know, you could see that in a lot of amazing charts. i don't know if we have the one i had in my mindful that today and right now we see those short positions spiking up. this is put on oil two to three months out. they are becoming more expensive, so positioning remains logn. -- remains long. anna: annmarie horden joining us on the oil beat. analysis nowitical and go to one of our top stories. told africa's anc president jacob zuma to step down. that is

energy agency, a rise in oil supply from non-opec nations may thwart efforts by opec and his partners to unwind production cuts that began last year. in south africa, the new president is gambling on a tax hike, the value added tax will increase from 14% to 15%, the first time since the end of apartheid south africa has raised the tax seen as hitting the poor the hardest. the president is trying to stabilize debt which could backfire in the election next year. kushner b is about his access to highly classified materiallaking it has led to a struggle with the white house chief of staff over who should see the nation secrets. jared kushner has an interim security clearance and his fbi background check has not been completed. global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. vonnie: coming up, when silicon valley tech -- the latest apple news. ♪ ♪ nejra: live from london, i am nejra cehic with the european close. vonnie: in new york, i am vonnie quinn. nejra: mark carney is things vague

it is partly because opec have had a handle on the market. they don't quite have the handle they had before. the global market is more elastic than it was 15 years ago, 20 years ago. more oil supply comes on. i would be broadly comfortable with the view that oil sticks it around these 60 mark to 70 mark. say: we had a few guests that we talked too much about the global supply story. it was very bullish when they talk to you. back at you. good morning. anna: thank you very much. he stays with us. we will get more from him shortly. we will focus on the u.k. investors are raising the bar. manus: throughout the show, we give you the latest breaking news on the markets. the equity selloff. is a is in correction territory. bitcoin getting battered. at money is flowing back to bonds. the dog that want the tale of ged theket -- that wag tale of the market. this is bloomberg. ♪ representsselloff what is very likely simply the ebb and flow of our stock markets. and we recognize that. the most important members to focus on are the fundamentals. the fu

that's more than saudi arabia which is opec's top producer. the price o crude sits below $60 a barrel and is off more than 7% over the past week, but gas, prichey're higher, up 7 cents on average to $2.65 for a gallon of regular gas. >>> time to take a look at esnight's upgr and downgrades. cisco's rating raised to buy from nutrans at net. the firm expects cisco to report prior than expected profit this year. it reports quarterly results on wednesday. analysts there raised the price target to $36 from . cisco rose 2.7% to $40.60. >>> general electric saw its price target cut at jpmorgan to $14 a share. the firm cites challenges to nd's businesses continued underperformance. the analyst reiterated his underweight rating onhe stock which he's had since 2016. shares of ge fell nrly 1% to .8 >>> it was upgraded to buy at stevele. it expects that company to report solid quarterly results later this week. the price target raised to $91 a share. the stockne g 1.5%. >>> lumber liquidators saw its rating cut to nutra to outperform at wedbush. the price

is opec a victim of their own success? are saudi and russia winning too much? yesterday, to oil ministers spoke to us. the kuwaiti oil minister said there's enough demand for them it'srry about shale but also a matter of the market. market positioning is pretty shocking right now. if you look at this chart, you 8490 threeis for us, shows the ratio of longs to shorts and it keeps on climbing. >> if you look at the short positions there are some climbing in but you would hardly have noticed a massive drop in oil based on where the positioning us. chart, thisee this is the common nation of wti and brent, it's increasing. speculative money remains positive. great stuff. thank you very much indeed. .e are now 10 minutes away we will be looking at the stocks you need to watch into the open. there are plenty more stocks to focus on. the open, 10 minutes away. this is bloomberg. ♪ ♪ >> our cost of debt has gone down as well. some financial flexibility in what we intend to do is keep on doing what we have been doing over the last several years which includes acquisi

so much supply out there that's at least a theoretical math but that how does that interact with the opec and russia production cuts that they announced the start and put in place last year so they've had cuts in that that may continue opec basically saudi arabia and russia are talking about bumping those production levels up just a little bit but keep in mind they need some of the highest rank even points for oil to meet their budgets than just about anybody so you know saudi arabia really needs about a good eighty ninety dollars barrel brant crude and so they need oil to continue to head higher and then also when you think about the saudi aramco i.p.o. coming up latter part of this year they need a high price of oil there to get squeezed a lemon to get the most out of that i.p.o. price as well. right absolutely where do you think that's going to end up that i.p.o. that additional public offering is going to going to be in saudi arabia is going to be a new york stock exchange. you know it's a good question i mean there's been rumors of london the us saudi i would think it would have to b

have also spent a lot of time in japan through my job at opec and i'll be enough it certainly isn't a developing country but the rationale is really a similar strategic objective and it's a very impressive rise of china and so far mixed results but overall a successful development model in terms of how china is investing abroad and how is the u.s. and japanese can work together to provide an alternative mechanism framework in developing countries. also, what has been the reaction of pulling out of the tpp. very much, countries that have been involved all along are still going forward and negotiating the tpp called tpp 11 and there is still this mindset, i guess recent news aside, in the trump administration, perhaps showing some interest in reentering those discussions, we will see what that ultimately comes to. tpp 11, the mindset in the countries in which i've interacted still have this kind of mindset of just waited out. this is only four years in the u.s. will likely come back and we will figure this all out and become this entity that was originally envisioned. so, those are my p

should opec still be concerned? opec's placese to evaluate what they think of explosive growth of shale oil from the united states. we should understand that explosive growth is happening. ,t's very strong and once again i would like to remind everybody that this growth is not limited to 2018. it may well go beyond 2018 and may have implications in terms of covering a big chunk of the global oil demand by itself. that was the iea executive director speaking to bloomberg. when will that market rebalance? the central bank of europe told eu lawmakers that he is sticking to his plan on stimulus. toghi said he's not willing reduce support for the euro despite confidence that inflation will pick up. >> we are generally more confident that our inflation is proceeding towards our objective. but we also have to be persistent and patient because the underlying inflation is not showing any convincing signs of an a protect. stimulus lives. long live stimulus is the cry from mario draghi. is it europe over the u.s. in the near t

john: it is particularly a challenge for the middle east and opec. now, you have a non-opec producer other than russia it is significant in the marketplace and will fill in when prices are moving up. with respect to the price of oil. anna: do have concerns about overheating, about the oil story running head of itself in shale? john: unfortunately, you do run into this problem. the market goes up when it was $90 or $100 a barrel. you get a huge overcapacity building, a lot of infrastructure, and then all of a sudden it cools off. there is volatility in that marketplace that creates a problem for lenders. we were at the think tank. let's talk a little bit about your. -- about europe. you walked away from the think tank with what perspective? john: the argument is the u.s. is way ahead of the ecb in terms of monetary policy. where the u.s. is ahead, but the ecb i don't see have the pressure to catch up. your inflation numbers are more is at, so i don't see this lot of interest rate increases coming in the future for the ecb. they don't need to catch up

if the demand is weaker than what people assume or if the agreement that opec and non-opec countries serve would not have compliance as of we have seen in the past. they go in a different direction, but the surprise could be different. strong growth. stronger than expected growth from u.s. shale. >> we heard from saudi arabia's minister over the weekend saying that, now, he does not see a rebalancing under 2018. he does not see exactly when and how. how do you read that? is there a rethink, a rebalancing could be much later? >> there are different years on rebalancing and the views of the people may well change throughout the time according to the changes in the market dynamics. observers started to understand the dynamics of the u.s. shale oil growth is strong, forthis has implications the global markets for 2018. i believe well beyond that. >> earlier this year, you talked about a possible explosive growth in u.s. supply. should opec be concerned about u.s. supply? it is of course after the think ofhat do they explosive growth of shale oil growth from the united states? first of al

you've seen these markets over the years and you say you have a longer term term view and and we do see opec and other nations russia namely that have their production one point eight one point eight billion barrels per day they're holding off the market but the u.s. seems to be making up for that so you do use see the increased u.s. production keeping sort of a governor on prices. absolutely i mean the united states has been i mean let's be realistic they've been knocking the cover off the ball i mean they're at the highest production rate that they've ever been you have regulations that are being pulled back like it or not it is what it is and that's going to enable more and more production to be made so i do believe that will be a major factor and keeping somewhat of a cap i don't see except for maybe a world event there an issue in the middle east i mean a major issue a major spike in prices and david can you tell us briefly about some of the other contracts and what they call the energy complex nat gas for example how's nat gas doing lately oh sure let's look at that gas that gas has co

you've seen these markets over the years and you say you have a longer term term view and and we do see opec and other nations russia namely that have their production one point eight one point eight billion barrels per day that they're holding off the market but the u.s. seems to be making up for that so you do use see the increased u.s. production keeping sort of a governor on prices. absolutely i mean the united states has been i mean let's be realistic they've been knocking the cover off the ball i mean they're at the highest production rate that they've ever been you have regulations that are being pulled back like it or not it is what it is and that's going to enable more and more production to be made so i do believe that will be a major factor and keeping somewhat of a cap i don't see except for maybe a world event there an issue in the middle east i mean a major issue a major spike in prices and david can you tell us briefly about some of the other contracts and what they call the energy complex nat gas for example how's nat gas doing lately. oh sure let's look at that gas that gas

faster than expected this year that's according to the organization of petroleum exporting countries opec the group expects demand for crude oil to rise by over one and a half million barrels a day sixty thousand barrels per day from its previous month any market report now you might be wondering what is actually driving the increase when so many countries have signed up to move away from the black stuff but opec says an expanding global economy is the main driver as austudy vehicle sales in the u.s. china and india and crude prices inched up on monday following the updated and pet cool coxed. chinese new year is just around the corner fall out for warning on a friday the sixteenth day here but new lunar new year celebrations may not be as bright or noisy this time around in china as that's to cut pollution the government has banned fireworks in forty four hundred forty four cities last year a victory that the bands are taking the bang for millennium business. it's known as the pyrotechnics capital of china here in the southern city of new young there's even a stop to to honor the man loc

finally feel that you know that space right now but a lot of things are happening to get us there we have opec that's behaving ok so they're kind of sticking together we've got demand that you know somewhat went up which is good but the key thing is that we have speculators that are in the market now at a much higher level on a much broader level and they slowly specially with the electronic training you know market can slowly bring the market up ok the real question is going to be is as we saw in the stock market today in the bitcoin market in all these other markets when speculators are in the market and there's a trading mentality i call it in my class the light switch theory everybody's a buyer guess what until they're not so let's talk about what might happen when that switch gets turned and that goes from buyers the sellers you could see a nice ten percent correction in this market as well it's not totally. on supply and demand there's so many other factors but right now it's holding nicely but david you've seen these markets over the years like you say you have a longer term term view a

opec international agency says the cartel is facing global problems in the u.s. and other rivals, goes out will surpass opec's largest producer, saudi arabia, and may overtake russia as the global leader by the end of the year. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. bloomberg. gopro goesing up, for gold, attempting a major turnaround. this is bloomberg. ♪ nejra: live from london. vonnie: this is the european close on "bloomberg markets". 2018 is a crucial year for gopro as their company is looking for a turnaround as they diversify sales and demand for existing products. we are with gopro ceo. >> correct, i am at the goldman sachs technology conference in san francisco and sitting with me is the chief executive officer, mick good when, and nick, i want to talk about something we discussed last time, you are open to a partnership or acquisition that extended the reach and relevance of the company, has her position change that all? same -- no,ll the still the same. an opportunity for investors