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00:00Joe great to have you with me. Look you've met and worked with Barker. No I chased him as a journalist on many many occasions. To me he he was a great sort of bringer of calm. I remember when the Russians ran out of old pack as we were at the start of the pandemic. The Saudis floated out. The Russians ran. The Saudis floated. And he just turned round. He just took command of the situation with the global press. So he was a great I suppose bringer together. Great. A great Corolla of cats. Wasn't he. He really was. It's great to be with you here today and to talk about our mutual friend Mohammed MCINDOE. I actually had a chance to have been chatting with him in recent days because he's nearing his tenure. And I actually spoke to him late yesterday evening and he was in very good spirits. And of course he was his home and is in his native Nigeria speaking at an energy conference meeting with President Buhari. But I think to your to your point you know he you know OPEC's secretary generals have generally been sort of technicians about energy markets. And he was he was that of course. But he was also an experienced diplomat and very widely respected and such a kind person. I mean there's so many you know examples that people have been relaying over the last 24 hours of people that he didn't even know and kindness and an interest that he showed in people. And I know even for members of the media who had to deal with him there was a great fondness for him as well. So it's a huge loss. I think you know he was already leaving. I'll pack at the end of the year but I'm sure he was going to be playing a very pivotal role in the discussion about energy markets moving forward. What do you think. Al guess who takes in he takes up the seat now officially. He was due to step in at the end of the month I think in an official capacity. What does he need to do to make the OPEC plus and I emphasize the word POS i.e. most most importantly Russia. What does Al Gay's need to do to set out the stall for OPEC going forward. Well look I mean he doesn't have a chance to even get get used to the office because he he. He's coming right into the job as they're transitioning to a new peak plus agreement. And I think you know there's a window of opportunity here since the agreement ends in September for something new potentially. I mean I guess the one option is they could just extend the current agreement till the end of the year which which is something that they have they've done in circumstances like this when the agreement ends sort of not at the end of the year or something but that just punts the you know this window of opportunity to the end of the year. And you know I think they have to take an assessment of where oil markets are and obviously what's going on with a potential recession which obviously I think is weighing on markets today. So there's a lot of work that he has to do just in terms of analysis of the market. And also you know Joe earning what OPEC's policy might be going for it. Well obviously we're building up to Biden arriving in Saudi Arabia. What do you think the outcome of that trip is going to be. Some hundred dollars does not weaken the call by the Americans and the Brits for society to pump more. Oh I don't think so. I mean I I would look I welcome the lower prices obviously. I'm sure consumers everywhere welcome them. But I would caution everybody about this being some kind of trend. I think what we're seeing really is an example of the high volatility and and and wild price swings that we've seen not just because of the war in Ukraine. I think it's important to underscore that you know prices and volatility were already quite high last winter dealing with the energy crisis in Europe and Asia. And and so the Russia situation has just exacerbated that. And so I think we're about to see a lot more volatility in the fall. There's a lot more shoes to fall here. Exactly what happens in China with demand I mean demand is already out outpacing supply in terms of the Jodi data that we keep of consumption and production data. So the risk then then you see the risk. Jill you see the risk. You see the risk then for these prices to the upside. Which brings me to the the rub of the issue. Spare capacity how much spare capacity do you see in this system is macro right when he says the sides are out there Max how much spark of Hang Seng you think is in the old system first of all. And how much more can the Saudis actually do. Well look I think President McCrum was talking about the OPEC plus agreement. Not not really global spare capacity. I mean a global script spare capacity which of course the majority of it is from Saudi and UAE is about 2 million barrels a day give or take. That could come on really quickly and probably another 3 million if you add in some additional time to ramp up additional production. But I think you know this is the. This is the key issue I think for Saudi Arabia and others. You know yes. You want to be responsive to the needs of the market in terms of supply. But also you have to be cognizant about the spare capacity issue because if you reduce spare capacity that actually has the perverse effect of raising prices. Well this was the question then comes down to his op ed plus started to discuss the new quotas for September to leave that window to add the spare capacity is that well progressed. Is that formulating solidly. Well I don't. I don't know about this myself because I've not kept in in contact with him regarding this policy but they everybody knows that there's you know a new agreement is ending. And so they have to figure out what they're going to do. And I'm sure these discussions are are well underway. Where's the upside in oil if you just let let let let's go there you've washed you've cautioned about more volatility. Where do you see the risk on the upside. Joe before I let you go briefly. Yeah. Look I mean I think we're in a situation of high elevated prices and volatility until one of two things happens whether the Russia Ukraine situation normalizes and those supplies or normalizes normalized or there is a recession and demand is greatly reduced. And I understand there's different forecasts for different banks these days. I'm particularly concerned having about supply because the EIA and may their forecasts for U.S. production was about two hundred sixty thousand barrels below what they had forecast. So I'm very skeptical about this additional supply from nano pack that's been forecast in different models actually coming back.

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Oil Fluctuates Amid Slowdown Concerns

Oil prices are wavering amid concerns of a potential global slowdown. Elsewhere, the US and its allies mull capping Russian oil prices between $40-$60 a barrel. Joseph McMonigle, Secretary General, International Energy Forum, joins the show to discuss the ongoing volatility in the oil market and the key achievements of the late OPEC Secretary General Mohammed Barkindo who passed away July 6. He speaks with Manus Cranny on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)

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