Monday will see both the imposition of sanctions on Iran, followed one day later by a polarizing election in the US. See more at: http://gulfnews.com/videos
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00:00Hello everybody, I'm Scott Shuey, and this is your Daily Business Wrap.
00:04Now, some of the stuff that's coming up this week is sort of exciting and some is not very
00:08exciting, but the one thing that's going to get everyone's attention is sanctions.
00:12Starting on Monday, the U.S. is going to put full sanctions on Iran, which is going to
00:16have a major impact on the oil market.
00:19Iran typically produces about 10 million barrels of oil a day.
00:23That's going to be gone now.
00:24That's going to be up to the OPEC producers and the non-OPEC producers, led by Saudi Arabia,
00:29and Russia, and maybe even the U.S. to fill up that void.
00:33Now, can they do it?
00:34That's a big question right now in the market, and in the short term, you're probably going
00:38to see oil prices spike.
00:40How much?
00:41Well, we're not quite sure at this point.
00:42We saw them hit $80 a barrel last week, and it could maybe even go a little bit higher.
00:47We'll have to wait and see.
00:49In the longer term, we're going to have to see what comes out of the U.S.
00:51Now, don't get me wrong, we're still going to see a lot of ramped up oil production from
00:56Russia and from Saudi Arabia, but the big question has always been U.S. shale oil and
01:01how much investment is going into that.
01:04That could make sure oil prices stay down.
01:06On a more local angle, we've seen more news out of the UAE today.
01:10The Supreme Petroleum Council has put out new guidelines for ADNOC.
01:14They're going to invest billions of new dollars into ADNOC to try to help them drive up both
01:19their oil production, they're looking at about 4 million barrels a day by 2020, and 5 million
01:25barrels a day by 2030.
01:27They're also going to drive up gas production.
01:29Now, why do they want to do that?
01:30Well, the short answer is we use a lot of gas here in the UAE for desalination and energy
01:35generation.
01:36And what they want to do is make the UAE self-sufficient, so if they can get all the gas from here and
01:41use it for desalination energy, that's better for the country.
01:44The other thing we're going to see on Monday is the global markets.
01:47Now, the last few days have been very confusing.
01:50Last few weeks have been very confusing.
01:52We've seen markets go up, we've seen markets come down.
01:54For a lot of various factors, we've seen interest rates coming up, we have seen U.S.
01:59and China talk about various trade issues, and maybe we'll see some leeway on that starting
02:04this week because we're hoping to hear comments from Chinese President Xi tomorrow at a conference
02:10in China.
02:11And later on in the month, we're hoping to see Trump and Xi sit down to talk about U.S.-China
02:16trade relations.
02:17Markets will be watching all of that.
02:19But what they'll really be watching is the U.S. midterm elections, which kick off on
02:23Tuesday.
02:24And if you've been following U.S. politics for the last couple of years, you know right
02:26now the U.S. is very polarized.
02:29And these elections are some of the most polarizing elections in years.
02:33It's going to be more or less a referendum on the policies of U.S. President Donald Trump.
02:38Now, what's going to happen?
02:40Well, the general predictions are that the Democrats may take back the U.S. House of
02:45Representatives, but the Republicans will hold on to the U.S. Senate.
02:48Now, what does that mean for us?
02:50Well, it means a lot of infighting there could affect the world economy.
02:54There's a lot of people who are concerned that you may actually see sort of a political
02:57gridlock in Washington over the next couple of years.
03:00If you think markets have been volatile over the last year, and they have been, they have
03:04been from as low as almost $23,000 to as high as almost $26,000, up and down and everywhere
03:09in between.
03:10That will likely continue because the politics are not likely to get any better over the
03:15next year.
03:16All right.
03:17So we'll be covering all of this throughout the week.
03:19Check in on gulfnews.com slash business for all the latest oil and markets information.
03:24And of course, on Tuesday, we're going to be doing live coverage.
03:27You'll see me and one of our reporters, Ed Klaus, giving you spot news throughout the
03:31night on the U.S. election to see how that goes down.
03:33All right, everyone.