tv Street Signs CNBC September 5, 2016 5:00am-6:01am EDT
welcome to street signs. these are your headlines. a sharp spark in crude prices that saudi arabia and russia will call for oil market cooperation in a joint statement at the g20 today. >> sterling hits a seven-week high against the dollar after pmi data posts a biggest one month gain in the 20-year history. >> backyard backlash as german chancellor angela merkel suffers an embarrassing election defeat
as the afd party pushes her cdu party into third place. volatile morning for the uni-credit shares. plans to raise capital at the same time as rival month dei paschi. we're told that the focus on italy lenders is overdone. >> i believe that the shape of the italian banking system is certainly not worse than that of many other european countries. we're seeing a huge jump in wti crude up by 4% to 46.16. brent crude has 48.94. also accelerating gains up by almost 4.5%. this is a report that saudi
arabia. significant announcement of -- >> 45 minutes time. of course, as soon as we get that, we'll bring that to you. also, reports saying that saudi arabia and russia will call for oil market cooperation and the two countries are set to meet at the next opec meeting. a lot of speculation here that once again we might see an output freeze. our iran and iraq going to play along. that's the big question. >> everybody needs to play. that's the view of prince turkey on the potential of an oil production freeze. speak at the forum, the kingdom was only considered an out put if all oil producers were fully on board. >> the issue of oil is obviously an important one. not just for saudi arabia. but for the world. and to say that saudi arabia walked away from an agreement, i think, would be the wrong way of
putting it. what saudi arabia is seeking is a holistic approach to the issue of oil production and oil crisis, not just within opec. but from all producers. the kingdom has been continuously urging other producers that if they want a common policy on oil they should all agree on what that policy is. not simply to leave it to chance or to undecision in order to allow people to do that. an example, russia coordinated with them -- it was iran and iraq that refused to be bound by this oil freeze and the same, i think, is the proposition in the next opec meeting. that all -- members of opec but all oil producers should have a
role in whatever decision is taken. whether to cut production or to increase production, increase prices. it should be everybody playing their part in it. >> the risk once again in algeria is that saudis are on board but the russians appear to be on board, but unfortunately, the situation is let down by the iranians and the iraqis. >> i hope not. i've seen some statements attributed to both countries in which they said that they wobbling to come along with that. i think that would be the best way for everybody, not just for them but for also saudi arabia, russia and the other oil producers. >> there is a look at saudi arabia's at this moment. it's at record highs, i believe. >> yes. >> say are they really going to be willing to freeze or to give some supply freeze at this moment when in the run-up to
this meeting, out put is still at record highs. there is a dichotomy there. >> i see no dichotomy at all. in defense that if there is an overhaul agreement, then nobody will be losing their market share. the danger for everybody is, let's say, saudi arabia cuts down production, others will take its place in supplying those that are not being supplied by saudi arabia. with their own oil. >> if there is a holistic approach to this and an equal responsibility undertaken by all countries for an oil freeze, then everybody can come out on a fair basis. >> we also want to bring you up to speed on the uk services pmi we had about 30 minutes ago sending sterling to a seven-week high. seen a reversal in gilt tightening as well. it was the biggest monthly gain
in the survey history no. surprise when you look at -- we have a reading of 52.9. that compared to the forecast for 50. services pmi catching a lot of people by surprise especially when those who didn't believe the strength of manufacturing. negotiations under way in brexit. what will the real impact be. >> forecast in this one. >> it also puts a question what the boe has been doing. whether to -- waited a little longer to see the actual effect. boost confidence.
>> he'll have tough questions to answer. let's check on the markets this morning. we are tentatively higher up by 0.2%. we're trading at 8 month highs. earnings upgrades and stock recommendations lifting the european stocks. telco are doing well. economic news as well. yur pine retail sales were up in the month of july, up 2.9% on the year end figure. that was better than expected. we did get mixed numbers coming from the pmi from the german and eurozone pm. is. those were disappointing. we did get the spanish, italian, french numbers. better than forecast. here's the market by market view. down by a third of 1%. once again, some of the banks are weighing on the index. downgraded by deutsche bank's zet rah dax. we're seeing similar percentage increases for the others.
>> in terms of the u.s. close on friday, there was plenty of confusion over what the job reports means fort fed. we eeked out modest gains. the s&p -- seeing percentage gains and the nasdaq for the week. 0.5% gain led by utilities because those are dividend paying stocks because we saw the interpretation of the jobs report. let's talk about that report. knock on payroll increased by just 151,000 in the months of august. that was below the 180,000 that was expected. steve leash man filed this report. >> wall street found a couple of ways to look at this report. it was seen as okay, up 151,000, less than a strong numbers on the prior two months but more than enough to keept unemployment rate steady. but if it was seen from a viewpoint of clarity from the
federal reserve, it was a lousy number. it's on the cusp of what might be good enough for the fed to hike. or just below it. barclays said labor market squeaked past the threshold for september rate hike. the fed on hold after not so labor day employment report. the markets split the difference, lowered the probability of september rate to 20%. but raised it for december above 50%. here are the numbers that caused the reaction. nonfarm payrolls below what was forecast from wall street. the employment rate was steady at 4.9%. it was forecast to fall by a tick. wajts are up a meager 0.1%. there was strong job growth in leisure and hospitality of 29,000. government the second strong month of 25%. retail surged by 15,000. but there were some marketplaces
of weakness. goods produced down 24,000 inside that manufacturing declined 14,000. stocks were down 6,000 in temporary help. an indicator of where things are going. decline by 3100. it's not a decisive number. we'll have to look for fed speak and data later in the month before the september 20th meeting to see if it's on or off for december. steve liesh man, cnbc business news. >> joining us now is g 10 fx strategist at b of a. kamal, thanks for joining us here. it was interesting to watch the dollar trade after that nonfarm numbers because we close the day slightly higher. steve was telling us how fed fund futures did dip their forecast for a september hike. not everyone is convinced. gold man still thinks there's more than a 50% probability. what do you think? >> latter rather than sooner.
if there's one phrase you can take out. it's not too hot, not too cold. the economy is still chugging along quite well. the problem is that the we had a weak pmi to reach the cargo numbers. showing some signs of -- i think for the market to be convinced that the fed will go, we need a broader collection of strong data to push the fed towards an earlier than later rate hike. still -- >> there's suggestions that the fed wants to wait to clear the u.s. elections. how closely are you watching the u.s. election for dollar effect? >> absolutely. you see it with the uk elections, the ex -- brexit. >> the market pear has -- there's a bit of investment streaming built into the market as well. >> on the show we've talked about positioning in terms of the dollar.
up point that out in your notes too. dollar positioning is weaker than it was a year ago. why is that? why is there no conviction behind this trade? >> because the momentum of data has been strong. >> the broader committee is very much in of the views that the fed should hike rates sooner than later. until we get confirmation from yellen herself, the market remains skeptical. booef had softish data waiting on the dollar. >> all right. kamal, we're going to keep you around for another chat. we'll talk sterling next up. for now kamal sharma, merrill lynch global lynch. he can get a cup of coffee. you can send in e-mails and questions to kamal. street signs firstname.lastname@example.org and also on twitter and tweet us at nancy cnbc or carolyn cnbc.
before a quick break, want to show you the oil prices. brent crude is rallying to the tune of 5% wti crude showing gains of 4%. why? there's speculation that there will be a significant announcement on part of saudi arabia and russia out of g20 in china in about half an hour's time. it could be calling for more cooperation in terms of the oil market production. will iran and iraq play along? that's the question. >> coming together in saudi arabia and russia. >> stay with us. you don't want to miss the latest. next on street signs, we've been speaking mario monti about one of the toughest italian jobs. cleaning up the banging sector, of course. stay -- banking sector, of course. we'll have more.
he's not worried about raising it. he's been on the jobless than two months and expected to launch a cash call in 2017 according to analysts. speaking at the forum in lake como, he'll outline the strategic plan by the end of the year. >> julia caught up with the former italian prime minister, mario monti she spoke to him about accusations made by matteo renzi that the banking sector should have been cleaned up earlier and asked monty why italy did not go for a spanish style rescue program. take a listen. >> today, although he's too immediate for the -- were there.
did not raise that point. i have strongly con futed on several occasions. first of all, as the imf and other financial institutions globally have many times underlined -- there were not major problems in the italian banking system other than for monte dei paschi which we tackled. second, there were no demands by the banks for rescue or any sort of support. thirdly, should we have asked europe or the imf for support for the italian banks, probably would not have been granted for lack of substantive motives. lastly and to me, very, very importantly and mr. renzi should
reflect more on this, that would -- i mean, making use of the benevolence of the rest of europe for the italian banks. so for italy generally would have for many, many years to come reduced to zero the ability of italy as an independent entity within the european union to make its case, as i did at my time, as on other issues, renzi is is now doing in the context of the european union. so he complains about his pr predecessors not having done at the time something that, a, was not needed. b, probably would have been impossible. c, would, if done, have made mr. renzi the most docile and silent
member of the european council. >> the reason i asked you that. i want you to fast forward to today. is it needed today? >> then you should ask mr. renzi. >> but i'm asking you. >> no -- >> in your view. >> i no longer have the details situation not being in charge now. i believe that the shape of the italian banking system is certainly not worse than that of many other european countries. certainly, i notice a huge, can i say, concerted effort by the angelo saxon media, uk-based or -- the attention from brexit into a pretend exit issue which
would be triggered by knowing the referendum, renzi's resignation, the inability for italy to be governed by anybody else. the catastrophe in the banks. i suggest that there should be more -- >> self-reflection. >> from a media point of view. but catastrophic conclusions. >> julia joins us now for more reaction to that interview. julia, it's interesting. he's saying it's not just a problem with italian banks, others have issues with them. that doesn't take away from the issue that there is a problem. >> i know. monty was being punchy there as well. renzi said to me a month ago that this is a problem that should have been tackled before. he said actually this wasn't such a big problem when he was around. at the heart of the issue was the issue with mont did he pae
and we're trying to work those out. whether or not this will work primarily because of sket sichl i see behind the scenes about whether they'll be able to -- nonperforming off balance sheets. whether or not the likes of jpmorgan and citi will step up and take part in this issue as well or at least underwriting that. it's a whole host of issues to face here. i also spoke to the chairman of the banks and asked him to address the skepticism about that deal. listen in. >> we should let them try and try hard to get the deal done. i think it's a bit too early too say. my feeling is that they are really trying different ways to have the deal completed. we should wait, i think, at least until september. when the position by the nps
will be taken. it is not an easy situation. but my feeling is that, you know, you have almost the best of the world working to solve it. >> i think the fear is that, if the solution doesn't work, then it will send a kind of ripple effect once again into the italian banking sector, which still feels very vulnerable here. >> if we say that this solution might not work, then we are introducing uncertainty about it. let's for the time being assume that it will work. >> do you think a bigger solution to address the nonperforming in the banking system is needed, though? >> markets for the npls is growing in italy, establishing itself. this is a major step forward. there's not solution yet. the problem is still there.
without the market, it will be unsolvable. now things are getting slowly better. it takes time. it takes time and it's not just a matter of injecting public -- sometimes legal procedures can do much more than public money to solve that problem. the government does not -- in that respect. in my view, it's not enough. >> you mean tackling the time it takes to -- >> tackling the timing for recovering, that's right. >> it still takes too long. >> it takes very long. fs very costly, so to speak and uncertain in the end result. so in solving that problem might actually have the market functioning properly. >> that's my response when you say does the market beginning -- i kind of disagree. until we have solved the problem
of being able to address bankruptcies and dealing with them sooner rather than several years, that market really doesn't exist. >> well, no. when i say that the market -- is beginning to -- i'm saying that you have -- you already have one, two, three, even more deals in that market. >> it's a beginning. >> it's a beginning. >> do you think that market grows soon enough that it prevents a shakedown once again that we saw in italian banking sector after brexit? >> no. i think that it is too slow with respect to the needs of the italian economy. >> yes. >> that's the real problem. we would need a banking sector fluent so to speak, free to work properly, which is not yet.
in that respect, it's certainly too slow of growth. >> the chairman there of bank owe popular in milano. he tried to get all the issues, not just nonperforming loans. in order to create some sort of market for those loans, you have to have an ability to sort them out. you have to have a shorter time period to address the bankrupt loan. as we've discussed already on the show -- >> how depressing is it to be back here in cold london after you've been on the -- >> it was raining too. >> the first time i've been there it hasn't rained on me. inappropriately dressed for the opportunity. >> i suffer it well. >> got to do -- >> hands off, girls. >> julia, thank you for that. let's bring you up to speed with the oil prices. that has been -- by 4.5%.
we did see oil frayeding higher as soon as the session got going this morning. a significant move to the upside on reports that saudi arabia and russia will deliver statements from the g20 meeting in china reportedly on cooperation over an oil agreement there's been a lot of speculation surrounding this one for quite some time, caroline. a bit of i'll believe it when i see it. >> also. want to see you what the commodity linked currencies are doing. the dollar is lower. also the ruin he will is gaining a lot of ground against the dollar at 64.61. the rue bell. >> bank of maryland global research still with us. do you buy this? >> i think we've been in many situations where you buy the rumor to sell the fact -- to decide whether this is going to
be more meaningful production. we as a house expect higher oil prices into 2017. so the direction of the dynamics are for high -- into next year. >> how much higher? >> i would think 15 bucks a barrel. that's quite a ways from where we are at the moment. the trajectory is a better global market. macro economic data improving growth. >> kamal, thank you so much for that. appreciate kamal sharma, g 10 ethics strategist at bank of america. >> we're going to go for a quick break. check out our blog which runs throughout the european trading day.
good morning. welcome back to street signs. i'm nancy hunger ford. i'm caroline -- a sharp fight in crude prices on reports that saudi arabia and russia will call for oil market cooperation in a joint statement at the g20 today. sterling hitting a seven-week high after pmi data posts its biggest one-month gain in the 20-year history. backyard backlash. german chancellor angela merkel suffers an embarrassing election defeat as the anti-immigration afd pushes her cdu party into third place. volatile morning after assurances on plans to raise capital at the same time as monte dei paschi. mario monti tells us that the focus on italy's lenders is overdone. >> i believe that the shape of the italian banking system is certainly not worse than that of many other european countries.
>> let's get back to the top story. a press conference any second now for -- reuters said that there will be a significant announcement. sources told the news agency that saudi arabia and russia will jointly call for a cooperation to sfor the oil market which has pushed crude prices higher. 49.29, up by more than 5%. wti crude gaining between 4.5% at 46.46. >> that move in oil certainly helping oil stocks in europe. let's get a view of how they're trading now. the ftse 100, the main under performer there. but basically flat at this stage to -- .2%. we've seen a boost in commodity
stocks as well. that's hemg the xetra dax. the ftse higher by .7 of a percent. overall, 4 1/2 month highs. this is an extension of the gains, carolyn that a lot have been hoping for getting into september wondering if the summer gains will hold. >> now volatility and volumes are coming back to the markets. >> plenty of political risk to watch on the horizon as well. not the least of them, the race for the white house. republican vice presidential candidate mike pence will release his tax returns this week. speaking on "meet the press," pence said that donald trump would release his returns, but gave no timetable. after a week of mixed messages from donald trump on his immigration plan, pence provided little clarity on the issues saying that undocumented immigrants would be treated humanely. hillary clinton's running mate defended the democratic
candidate over her ongoing e-mail scandal. kaine is unaware of the sensitivity of the information in the e-mails because it had been improperly labored. this comes as recent polls which show the race between the two candidates is tightening. let's get out to tracie potts in washington. good morning, tracie. you might say we are getting into crunch time here with september under way. just weeks until the first debate. what should we expect in the coming days? >> well, expect to see a lot of democrats out today. hillary clinton, bill clinton, vice president biden, tim kaine, bernie sanders is even out for the first time on his own campaigning for hillary clinton. obviously, they're making a big push now that we are just over two months away from this election and she is still leading in most of the national polls and battleground polls. her numbers are starting to slip a bit over the last month or so where donald trump is not gaining. interestingly, most of that
support is going to some of the third party candidates. they're trying to get out there and make this big push. both sides really going at it on a number of issues. you mentioned immigration where donald trump was having a hard time trying to explain the basic question, what happened to the 11 million law-abiding i am granlts. not talking about the criminals he wants to get rid of initially. but the law-abiding immigrants who came here -- what is their fate and there hasn't seemed to be a clear answer on that. he wants to treat them humanely. they would have to leave and come back. he hasn't been extremely clear on -- then he said afterwards they may look at that decision later. that's something that looks like they're trying to explain. >> so far clinton has been out-spending trump in terms of tv ads by 9 to 1 i believe.
trump has $10 million worth of tv ads. do you think that will make a dent? >> it will be easy to see if they're pro trum or anti-clinton ads. is he going to make a case for himself or do what voters have largely heard through the media and many of his rallies, make a case against hillary clinton. that could make a difference. >> thank you for that, tracie potts from washington. let's get out to global head of industry of bmi research who joins us around the desk. urp looking at the impact of the elections on the mining industry. many people would argue that the mining industry in the u.s. is in a structural decline anyway. the outcome of the election won't really make a difference. precisely. the mining industry is not just what we're looking at, we're looking at a spectrum of industries, mining, oil and gas, pharmaceuticals, et cetera. there are certain industries that will be the looters. some will be the winners.
along with oil and gas. along with possibly -- no matter who wins, there's so many global dynamics that come into play, it won't really change what we call to the structural decline as you correctly pointed out in mining. >> what industry will be a winner? >> infrastructure. >> exactly. that's actually the one area where both candidates converge. not only has clinton pledged 175 billion for infrastructure spendi spending -- also trump has pledged to match that. double it. it's actually quite a departure from what you would expect from the republican party. both parties have actually converged there. we don't see a lot of congressional position on the infrastructure side. we think that will be definitely an industry that will do better under either presidency. >> your best case is that
hillary clinton wins. by a minor margin and some of the polls suggesting. some say it's too good to call. we've seen some movement in the polls. let's say we get a trump surprise here. how would you position? >> what's important one thing to clarify. certainly when you look at the industry side of things is that when you go down to specifics and go beyond the sound bite in a pre-election. it's not just who the president is. we look at congress. currently, we have a clinton presidency, democratic senate and republican house. that creates a bit of gridlock. in a case of a trump presidency where you potentially have a congress that's still republican as it is now, it does create more, less of a gridlock but there might be -- there have been big announcement frs trump. >> which is a good point. we have to look at the congressional outcome as well. the politics and personality debate going on. you've looked at agriculture
with the links to i am grapgs. that has become increasingly important debate. how does this play out once we know the winners? >> for the labor and immigration specifically, very, very big part of the industry. makes up about 20% of -- from our analysis. it will be a major setback if there's a severe scaleback in immigration policies. we have a clinton scenario and she has been a lot more moderate looking to expand potentially the -- legalizing some of the -- becoming more open. that is mutual to sort of a steady as she goes, as it were, from current policies. trump would be, again, an upset. >> what do we know about trump's policies or policies for agriculture, for steel, for mining? it haechbt been clear on many of
the issues. is it guesswork at this point? >> there have been more tangible examples. less so than what hillary clinton has given. so for instance, we know that very much in favor of coal industry. he said he will repeal the epa. again, to what extent it goes through congress arks completely different question. there's grudges between the pharma industry, both have said drug pricing could become a big issue. they're gearing up for a big battle down the line. trump, if he has -- to a certain degree with hillary on this. on mining, again, as i said, it goes back to the polish u. he wants to protect opening up federal land for oil and gas drilling. so there are nuggets of specifics. >> on the issue, hillary clinton tapped tim kaine and his environmental policies perhaps not as friendly to environmental
causes as you might say hillary clinton's are. does this suggest we could see a softening of her position? >> it certainly would give it an olive branch. he's from virginia. not a coal producing state. it is a way to potentially show that she won't take. more extreme view, if you'd like, on the industry. but it's not as we said in the beginning, whatever happens in the presidency, a lot has -- what happens with coal has to deal with prices. a lot has to deal with state regulation. it's a lot more what happens on the state level than the federal level as well. bear that in mind. >> thank you so much for bringing us that perspective. global head of industry at bmi research. the oil markets are waiting with baited breath for that announcement from the saudis and the russian energy minister. the russian energy minister has arrived at the saudi arabia news conference which is under way.
according to reuters reports, we're expecting an announcement between the two countries in the oil market, a possible freeze. brent crude is up by 5 -- the wti crude price is up 46.38. also gaining by 4.3%. both prices up for session highs. the question remains whether iran and iraq are going to play along or do they commit to some sort of agreement out of this meeting? >> i believe this morning iran came out saying we can boost production to free sanctioned metals. that would be 3 -- they're showing an eagerness to boost production when we're talking about freeze. others have saying, feechb we get to -- will it have an impact then? is the talk simply to move prices. nevertheless -- according to
agencies, they said that russia, saudi arabia have signed a joint statement over the oil market. we're simply awaiting more information. awaiting that statement out of the g20 in china. we'll bring it to you as soon as it comes. all right. meantime, you're looking at live pictures of an area where truckers and farmers plan to block roads and form a human chain and a protest demanding the closure of the migrant camp known as the jungle. this as it has surged and tensions ris then recent months. john claude gunther said the eu tax on apple was based on facts and rules and that the decision was not aimed against united states. ireland, meanwhile, called it an attack on a corporate tax regime and is set to appeal on wednesday. julia spoke to the finance minister of poland at the forum and asked for his thoughts on the european's decision on apple. >> i should learn more about the
merits of the case. that's true. because i've been writing the -- for some of the reports. we have obviously quite a debate to a point. first, whether the commission is not using thunder showers it does not have. powers over the taxation of the corporations. >> uh-huh. >> and insofar aggressively or abrupt manner. to direct, to tell ireland what it should do. try the other story, is the part of the sweet deals obtained by people like apple and others not only in ireland but in luxembourg, the country of the -- but not the -- himself. so that's -- there are quite
numero numerous aspects of that. >> is the european commission overreaching? >> this argument could be formulated in in manner. but as i said, i'd be happy to answer these questions when i learn more about the merits of the case. because like it's head-on collision. it differs substantially from what others are saying. it's a very, very provocative issue. >> julia is back onset now. other countries, might they be scared now? >> i think that's a great question. spoke to the competition commissioner last week, she said to me, look, we've got the systems now and the data in place, we want other countries to use them. we clearly have seen backlash in ireland and that the tensions are -- they're saying we'd rather have the business and welcome the -- rather than
perhaps get more tax money in. i do think it's going to be interesting and i think countries like poland them self-you have companies like apple that are operational. clearly it's higher than -- this raises questions. >> i have to wonder if brussels should be concerned. coming out in defense of the defense. i think dies a bloom said apple is out of touch with the mood of society. people want companies to pay tax. others might say russell is out of touch. the fact that they have to listen to tax policies when as you pointed out earlier, the irish government signed a deal with apple. ultimate return. when does this create backlash when we talk about the eu facing a problem here because of so much people raising red flags and who comes after brexit. >> this is a great point. there's no -- what you said there. there isn't. you can look at how a company or
a country operates and say i don't think the way that you're collecting tax is fair and fine. you can -- to look at something they signed 20 years ago and go, hey, this is not fair and we're going to retrospectively charge tax, i think it's wrong. it's a risk that these companies cannot mitigates. do you come to europe with the possibility that something you've done 10, 15 years ago becomes a problem in the future. dodgy. want to come back to what's happening at the g20 summit where saudi arabia has been holding a press conference about its deal with russia on the oil market cooperation. russia and saudi arabia note the instability in the oil market. saudi arabia, energy minister said they've signed a deal to seek cooperation in the oil markets with russia. we're seeing that brent crude is -- some of the gains we're now at 3.78%. the gains were higher by as much
as 5% earlier on in the session. crude at 45.98, still up by 3.5%. some of the gains have come back down. the market maybe was buying the rumors. >> we've seen this one before, also on a day where rome is ready to boost production. that leaves a lot of questions. yes shall the agreement is one thing, but implementation is another. making sure a party sticks to it. who is to say they're not going -- always these questions when we hear these statements. we'll continue to bring you the information. >> lot of action in the markets this morning. we'll have plenty of coverage from that and more from g20 when we come back. stay with us. ♪ using 60,000 points from my chase ink card i bought all the fruit... veggies... and herbs needed to create a pop-up pick-your-own juice bar
let's continue with the commentary out of the 20 in china regarding that oil cooperation between russia and saudi arabia. the saudi arabian energy minister says they will cooperate with russia in the energy industry and minimize volatility in the global oil markets. russia's -- the energy minister and saudi's -- they'll meet in algeria and in november in vienna according to ria, the news agency. that's very, very important given that russia is not officially an opec member. you can only seeing this leading to sustainably higher prices if all the parties are involved play long. >> there was a lot of anticipation going into this announcement awaiting on it. you hear from two parties they're going to set up a working group to monitor the oil markets. that may be the reason we're seeing a pare back.
not to be -- >> let's get out to julia again. you were in italy over the weekend. what was the main take away. >> the interesting thing is the saudis here. we've seen them ramping up production and exporting record volumes. they've got to a point where they're like, okay, fine, we've boosted out puts again and again and at record volumes. the timing brought an important number. you brought $16 billion worth of bonds that they're going to sell in the fourth quarter. there's also potential for the saudi -- they do have reasons to want oil higher here to make the kingdom the -- more solid. obviously the higher oil prices, the better price they get. we're in the first quarter of next year. there's reason for the saudis to
want -- it feens a stronger performance for their environment too. the problem all along, what they were saying back there to cooperation. great, if the russians and the saudis are cooperating. what about everybody else? >> exactly. it does bring the issue of perhaps, partnership between the two, may have more lobbying power at opec. even so, there's an implementation question there. how do you monitor it? we've sienna agreements before where parties pump up out at levels. >> i bet you could get an agreement -- you won't get the likeness of the iraqis signing on the dotted line if they're not willing to partake as you say. the problem with opec all along, everyone says fine, we'll go with this output level and they increase it behind the scenes. that's a separate issue. here, it just depends on what weight the russians and the saudis put on iran and iraq. >> one more thing.
the russian energy minister says it kplus ways to stabilize including limiting oil output. >> market share. >> another voice joining in. oil analyst from that -- thank you so much for joining us. last minute. what do you make of all this? is it credible? will it work? >> hi there. thanks for having me. i think it's acquired for sure. when we look at the recent balances, without a freeze, we're going to have a little bit longer oil markets to balance. this freeze is necessary and something that is pushing countries such as saudi arabia and russia, the two main and largest producers in the world to try and cooperate now that none of their strategies before this have worked.
secondly, because iran has now almost increased production by -- the sanctions were -- there is only limited production that it can bring forward or out further between now and next six to 12 months. it is a great opportunity for them to try and cooperate and even, if possible, try and freeze production to boost prices. it's a win-win for them. >> it's not just iran. it's nigeria, libya, iraq. all of these con tris want to reclaim some of the lost market share. >> agreed. i think i still main than that a freeze to happen or even the -- to be reinstated in a more sustainable way, you need to have all the producers producing at the optimal levels. unfortunately, their optimal levels will go down further if the prices remain low. for them, the only workable solution is trying to find a support to the oil prices. that oil prices have not yet
found. they were under the impression that we were going into rebalancing towards the end of this year. however, the -- this year has only led to the u.s. producers bringing in more production. it's not really helped oil market balance. opec, which is causing the glut in the market and not the producers right now. opec has to make a decision on how to address this issue going forward. >> interesting you mentioned the u.s. producers there. last week that was the factor that put prices under pressure. once again surprise over u.s. stocks climbing there. it does raise the issue as every time we see this price increase, aren't we going to see restart there? >> unfortunately, we will. however, there's only so much upside on that. despite taking into account -- you can't stop american production or u.s. shares production. they're still improved on every share. even if the prices were to stay low at 45 or so, they will still
bring in some of the excess production from the uncomplicated well. that's not a sustainable solution toro peck unless they are ready to wait for 12 to 18 months. time is against them now. if they can wait for 12 to 18 months, probably they can solve this problem of excess supply from the -- nonopec producers if that's what they want. can they wait for 12 to 18 months? even saudi arabia and the large producers, can they take the risk of having oil prices at 45 or below that. that remains the big question. >> you sound confident that we could possibly get a deal. what's the price for oil if they -- they do sign on the dotted line? >> i wouldn't say i'm confident of a deal. i would say that i think it's the right opportunity for them to do a deal now than -- now iran is less of an issue or a
nonissue than it was when iran was about to come online. i think if they were to sign a deal here, we could possibly see oil prices very quickly rise above $50. probably go towards 60 in the coming months. i think that level of oil prices makes -- if it's probably likely to may keep oil producers, particularly saudi arabia for that matter. even russia happy. >> thank you so much. despite -- that's it for our extended edition of street signs. thank you so much for watching. lemonis: how are you doing?
tonight, on "the profit"... -richard: what do you think? -lemonis: oh, my gosh. ...a progress report. this place looks great. over the past 18 months, i've traveled the country, trying to help small businesses, everything from pie shops to used-car lots... wow. look at this place. ...to clothing stores. some were in desperate situations. michael: [ voice breaking ] do you think i like to stand next to a man like you and admit that i can't be successful? [ sighs ] lemonis: others just needed some guidance. come on. you're a smart guy. you do the math. and i offered my money and my expertise for a stake in the business. -do we have a deal? -hank: deal. -pete: yes. -alan: yes. lemonis: a few of the deals went south.