Oil Sparks Inflation Concerns; iPhone Ban?

Good morning.

I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.

Oil's trading near its highest level since last November, but right now ninem Ex scrud's giving back some It's trading at eighty five dollars ninety nine cents a barrel. That's a decline of eight tenths of one percent. The global oil market is tightening, though, after OPEC plus leaders Saudi Arabia and Russia announced their extending supply curves through the end.

Of this year.

Bloomberg Oil reporter Julia Fanzeri says the surprise extension will tighten the market.

Traders are really surprised, not by necessarily the quantity, but the fact that it has been extended until December. So they expected that Saudi Arabia was going to extend their production cuts one million barrels a day, but till December. That's really going to tighten the market to the end of twenty twenty three, and that's what really caught traders by surprise and what sent markets soaring to above ninety one dollars a barrel for Brent at one point.

And Bloomberg's Julia Fanzeri says oil surge is stoking a fresh wave of infletion fears around the globe.

Well Nathan, stocks in Europe are fallen a bit. Disappointing economic news this morning out of Germany, and we get the latest from Bloomberg's You and Potts You in Good morning, Good.

Morning, Karon Nathan. Factory orders in Germany plummeted in July, assigned that Europe's biggest economy continue to struggle into the third quarter. Demand dropped by eleven point seven percent from the previous month, far worse than the drop expected by economists. Despite the data, ECB Governing Council member Klaus Cannot says investors betting against the Euro Area ratich next week are maybe underestimating the chances. He tells Bloomberg the meeting will

Okay you and thank you. Over in Asia, the yen is trading You're a ten month low this morning. Dollar strength prompt to Japan's top currency official to say he would not rule out any options if currency moves continue. The Chinese Central Bank also moved to defend the yuan with another record strongest daily fixing.

Meanwhile, Nathan Chinese property stocks are trading at a one month high. Investors are betting there will be more policy support for the sh struggling sector. China's housing crisis has produced a record wave of defaults. Authorities have recently rolled out a bunch of new measures to support the industry.

Staying in China, Careen, there's word this morning the government in Beijing is barring staff from using Apple's iPhones at work. Let's get the story from Bloomberg' John Tucker, John.

The Well Street journalist. As staff add some central government regulators' offices received instructions via chat groups and in meetings to stop bringing iPhones and other foreign branded devices into the office. China is Apple's biggest international market in iPhones, who among the country's bestsellers and are common in both the government and private sector. Foreign devices have long been discouraged the

Radio, all right, John, thanks, Another high tech company is in the spotlight this morning. Bloomberg News has learned Amazon will likely be sued by the Federal Trade Commission later this month, and we get this story from Bloomberg's Jeff Bellinger.

It caps a four year anti trust investigation into Amazon. Sources say the suit is expected to target the online retail giant's popular marketplace. That's where third party merchants, which now account for more than half of the company's online sales, pay a commission on each sale. Merchants have complained that Amazon unfairly ties access to its marketplace with its logistics service.

Thanks, Jeff. In politics, Senate Minority Leader Mitch McConnell's back at work in Bloomberg's Ed Baxster reports he did address the attention his health has received.

Senator McConnell says he wants to put things in perspective.

One particular moment of my time Backholme has received its fair share of attention in the press over the past week, but I assure you August was a busy and productive month for me and my staff back in the Commonwealth.

It should be noted the Congressional doctor again has said that he shows no signs of stroke or Parkinson's and that those moments are common in some concussion cases. McConnell also said job one now deserving his full focus as keeping the government open and as he puts it, the lights on. I'm Ed Baxter, Bloomberg Radio.

All right and thanks well. It's the toughest punishment yet over the attack at the US Capitol. Former Prown Boys leader Henry Henriguer Tarrio has been sentenced to twenty two years in prison for his role and a seditious conspiracy to block the peaceful transfer of power. On January sixth, twenty twenty one. Tario's lawyer Naive Hassan says he plans to appeal.

We asked for a recommendation that's not greater than fifteen years. We saw sentences that were handed down last week, and that's what we thought was appropriate based upon the guidelines.

Until now, the longest sentence for a January sixth conspirator was eighteen years. Prosecutors had been seeking thirty three years behind bars for Tario all Ry, Nathan, thanks time now for a look at some of the other stories making news around the world. For that, we're joined by Bloomberg's Amy Morris. Saymy, good morning, Good morning, Karen.

America's top diplomat, Anthony Blincoln, has arrived in Kief and a show of US support. The surprise visit by the Secretary of State comes as Ukraine's forces continue a grinding counter offensive against entrenched Russian positions. Bloomberg's wrong Ross Matheson says the Biden administration is sending a clear signal to the world.

Point of Lincoln's trip to Kiev is just sort of a public display of support for Ukraine, perhaps sending a message just as much to Ukraine's other allies as to Ukraine itself. There's been that sort of sense of creeping fatigue.

Bloomberg's Ross Mathis and says it is likely that Anthony Blncoln will also use that trip to announce further aid for Ukraine. US security assistance to that country now totals more than forty three billion dollars since Russia's invasion early last year. President Biden is celebrating a labor deal for port workers at the White House today. He intends to use the event to underscore his economic agenda, known as

This is coming back unless we stop it from happening. That's why I introduced this legislation, and I'm going to force the Democrats to vote on it. If they say that mask mandates are not coming back, then come to the Senate floor vote with us and say no more mask mandates.

Let's make it bipartisan.

He's calling it the Freedom to Breathe Act. It would also prevent industries from refusing service to people who choose not to wear a face covering. Health experts are warning about the triple threat of respiratory diseases picking up early as we head into colder months. Doctor Larisa Pisney is an infectious disease physician with you see health.

What we saw in the southern hemisphere, so their winter is our summer. We saw that COVID peaked and then flu and RSK followed, so important to think about all of these now.

Fcture.

Pisney notes that respiratory disease tracking indicates a typical start of cold month viruses are going to pick up four to six weeks earlier. New research shows that a highly mutated strain of the coronavirus is actually less of a threat that previously feared. The Boston Globe reports about Israel's study found the immune response is robust against all variants, including this new one called BA two to eighty six if you've contracted COVID since December of twenty two. New

Karen.

All right, Amy, thank you. It is time now for the Bloomberg Sports updates. Laker's John Stashauer, John.

Karen Terry Francona is sixty four years old. He's been a big league manager for twenty three seasons, and he went on MLB Radio and certainly implied that he's going to retire after the season. He's managed the Phillies to the Red Sox to two World Championships into the past eleven seasons he's been in Cleveland. He says he has told the Guardians to start preparing. Cleveland lost at home to Minnesota eight to three. That puts the Twins up by seven games in the Al Central. The Red Sox

Gone, the Rays.

Has plugged it off w Dae with the calls.

The Rays win eight to six. The Orioles also with an extra inning win in Tendings over the Angels five to four, fourth straight win for Baltimore. They're up by three and a half on Tampa Bay Giants loss of the Cubs at Wrigley eleven to eight. Toronto won seven to one at Oakland behind the former Oakland A pitcher Chris basst Yankees a five to one win over Detroit John Fellows Stanton snapping a time at the two run home of the sixth and eighth first Stanton career home

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This is Bloomberg Daybreak.

Good morning.

I'm Nathan Hager. The tight global energy market could get even more squeezed for the rest of this year. Crude oil is trading near its highest level since last November. That's after Saudi Arabia and Russia both announced that they're extending production cuts that have been in effect for much of this year for another three months for more. Were joined by Will Kennedy, Senior Executive editor for Energy and

Here.

Why extend those cuts into December rather than just another month as many analysts were expecting.

Well, I think it shows Saudi Arabia's desire to keep a strong grip on the oil market and to make sure that prices stay relatively high. Clearly, they want to make sure that the impacts of bebbage factors in the market, the steady flow of crude from Iran more than offset by the cuts that they in Russia are making together. And it shows a willingness to really grip the oil market. And I think importantly it also shows that in an oil context, the alliance between read and Moscow remains strong.

Certainly seems that way when you see the scope of apparent coordination on these announcements. Do we have a sense from some of the analysts that you're speaking to about what kind of price target Saudi Arabia and Russia may be looking for with these prolonged production cuts.

I mean, Saudi Arabia will always tell you that they don't make a point of targeting prices, but I think if you look at the Saudi economy and the spending that Saudi Arabia needs to finance, they probably need a

You mentioned Saudi Arabia trying to keep more of a grip on the oil market, away from some of the supply that could be coming back from Iran. What further rebalancing of the oil market could we see from an extended production cut like this from the Sadis and the Russians.

Well, I think a lot of people expect the dev aren't that many extra sources supply. I mean there have been. The market has been relatively well supplied and been able to meet the strong extra demand we've seen as the whole world has fighly emerged from the pandemic. A lot of that supplies come from Ivana. As I say, Venezuela has managed to export more, Brazil has added a lot

I guess time will tell as well how much further price pressure this could put on a global economy that's still struggling to deal with reining in inflation. I mean, a move like this is going to make central bankers' lives even that much more difficult, isn't that.

It definitely feeds in And of course the thing about oil is it feeds fake quickly through to gasoline prices, which is a price that everyone knows and sees quickly, and it makes people feel poorer, even if you know the general price level isn't vising quite as high. So it's a political issue as well as well. We know if oil price is at the pump or gasoline prices at the pump start climbing for consumers around the world.

Our last minute here will Is there any way to game out what we should expect after December when the next potential decision comes down the line from Saudi Arabia, Russia and potentially other members of our PEC class And.

Look, I think it's hard to say other you know, everyone is meeting their current commitments. I think that they will look at the market, They will look at how demand, how strong demand has been in the final quarter of the year. You know, they will want to assess where the Chinese economy is how bad those property wobbles have spread, and they'll think about what to do next. But I suspect it's too early to say. I'm afraid.

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