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00:00This GTA V chart on the Bloomberg first of all showing something very obvious when you have the OPEC plus really cutting down on supplies. Those lower output no supporting prices that on the second panel. What are you expecting in terms of prices given what we're seeing right now happen inside the cartel. You know well you can't argue with how the market is viewing things at the moment. Certainly they're there. Their view that the breakdown in talks will see current production limits being maintained rather than rather than increasing. And then obviously coming at it at a fairly crucial time with summer driving season in the US and Europe really driving demand higher. So with that I do expect prices to to continue to push higher in the shorter term. But you know I'm concerned about what I suppose the potential breakdown of unity within IPA could mean for supply and thus the oil market over the over the medium term. Certainly UAE demand for higher baseline production numbers to allow it to to increase output I suppose does raise the risk that that unity that that compliance that the group has maintained could break down. And I think you know that has been a big part to why prices have been relatively stable even though we've seen a a strong rise over the past 12 months. So I mean it could shape the belief within the market that that compliance will continue. So could the relationship worsen as badly as it did last see her during the price war. Look um it's certainly got the potential but I think for the moment I could still see some path out of it at least in the short term. You know you could you could see that proposed sort of 400000 barrels a day increase allowed for the rest of this year. And then the issue around the the pushing out of the expiry date of the supply agreement to the end of next year potentially tackled at a later date. But look I think you know we've had some very strong strong sort of compliance over the past 18 months or two years really within this group. And that's always very hard to maintain when you get so many differing sort of you know producers who have got obviously a lot of drivers dictating what they want to do. So yeah I don't think it's going to get to the point that we saw recently but certainly it could certainly allow you know that that perception from the market to wane around strong compliance. Will the supply gap change the picture when it comes to US shale. Because you know mostly they've been on the sidelines waiting for an outcome from OPEC. Yeah I think that's an important factor to take into consideration. I think Saudi Arabia certainly has been comforted by the relatively cautious outlook that U.S. shale producers have taken so far. Certainly drilling activity is picked up but output has remained relatively subdued. And I think with those producers now looking at returns rather than pure volume growth I think the outlook of a strong pick up being in U.S. shale is relatively low as well. So yeah that does give some comfort to opaque. And Saudi Arabia and pretty. They will be able to to increase output over the medium term without losing too much too much market share. Dad of course it has been a torrid first half for most of the commodities complex. Taking a look at the rest of the calendar year do you expect these you know the talk about a super cycles to be ignited. Oh look I still think the fundamentals are very strong. I mean we're certainly coming into a slightly softer period for forward demand. Traditionally yeah the July August period has seen growth in demand slowed down particularly in China. But yeah that paid top level of demand we're seeing coming out of the pandemic. I think still has plenty plenty to go. And then you have obviously a lot of the supply side issues across many commodity markets exacerbating that tightness. So I think the foundations the fundamentals are still very positive. And I do think over the next 12 to 18 months we continue to see very strong price increases. But at the moment certainly some softness. We'll see prices probably just trade sideways.

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Is Oil Going to Keep Rising?

Daniel Hynes, senior commodities strategist at Australia & New Zealand Banking Group Ltd., discusses the outlook for oil, which climbed back above $76 a barrel after OPEC+ ended days of talks without reaching a deal to bring back more halted output next month. Hynes speaks with Shery Ahn and Haidi Stroud-Watts on "Bloomberg Daybreak: Australia." (Source: Bloomberg)

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