Oil is heading for the first gain ahead of the Global Production cut to reduce the glut. They are also seeing the biggest fullyear rise since 2009 despite stockpiled at the highest level in three decades. Producers have agreed to cut output sunday. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Lets get a check of the markets now. It is a mixed day, but hong kong, china doing better than the morning session. Asian stocks are fluctuating. Singapore, tokyo, mumbai. Back in half an hour. Time now for the best of Bloomberg Markets middle east. Yousef it is the end of the year that saw the end of opec. Welcome to Bloomberg Markets middle east as we wrap up 2016 with this special Holiday Edition. Im yousef gamal eldin in dubai. Lows,barrel, 13 year record stockpiles, supply outweighing demand and i ran back online. Something has to give, and it did. Opec agreed to the first Production Cut in eight years. We have more from singapore. Reporter going into this meeting, the real differences were between iraq and iran. Going up to the meeting, iraq and iran argued they should be exempt many Production Cuts because iraq needed money to fight isis, iran was lifting production from presented levels. Presanction levels. I ran finally agreed to be a part of this, it had the second highest Production Cuts after saudi arabia, and the two of them accounted for more than half of the group. That leaves wiggle room for iran, instead of now trying to push Oil Production to the presection limits will now sanction limits will now have more. Everybody gave a little and took a little. Those three were able to bring everybody else and behind this is 1. 2 Million Barrels per day reduction in oil output starting next year. That lifted wti prices as much as 10 yesterday. The big winners are Oil Producers, the Rising Oil Prices all over the region. Singapore,s in seeing uplift. Energy giants in china are benefiting from this. Airlines and recliners are having rougher go of things. There are questions in the oil market about how this will play out. Morgan stanley said hiler Higher Oil Prices mean you will see investment in u. S. Drilling from shale and other players. That could add to the second half of next year, leading to price instability this time next year. We will see how everything shapes itself out over the next year or so. In the game is back of defending the price of oil, and russia among other nonopec reducers followed suit. Kuwait chairs the Monetary Committee and says it will begin in january. I spoke to the ceo of color energy and the Founding Partner of morton frisk after this was done. I dont think it is going to be very sustainable. Two things are going to happen. There is a lot of oil out in storage, both floating storage in logistics as well as official storage. With these high prices and the forward curve, some of that will not come into the market, and it will go quickly under pressure. This is christmas coming early for shale producers in north america. Is this deal,able 1. 2 Million Barrels a day, given that you will give shale in the u. S. Quite a significant floor . They will put more oil into this market. The car as a couple of questions there. There is a couple of questions there. Saudis demand lower. After six months it will be summer in saudi arabia, production will have to go up and the deal will go under strain. And then shell is coming back, starts cominghale back, will opec stay with the cuts will it be stronger than anticipated . Another person we spoke to again, it isd done, the execution. They put together a community, they are supposed to oversee the agreement it stood by. Are you optimistic given the track record we have had from opec . It does not speak to a very significant degree of compliance. Are they going to be able to turn things around this time . For opec, it would be good if it happens. Do you think it would happen . The man is already outlining it. He is already skeptical, and im with him. You will get with that how about you, robin . You may comments over the weekend about not implementing the deal. U. S. Shilique recovery shale recovery will tip the balance against opec. , but it will be cheap everybody went cheap on their quotas. Ofwill be secondly because one Million Barrels per day or Something Like that. With one mentor start cheating member start cheating, two or three isnt far away. If all the part. A beautifuls him chart clients can pull up on the bloomberg, this really shows you the latest numbers in the index. Look at the uptake, we are up once again. Lou parts indicating builds in the red, and the red is declines. The yellow line really shows you u. S. Crude output which has jumped accordingly. Again, where does this go from here, the u. S. Shale story . Some say you see games until 2018, then things slow down because of permits. What does it look like . Morton i think the sale story is just getting done. This is going to expand tremendously. When you look at the chart here, one very important thing, back these that is not the case today. In addition to the increasing rate convenience, rig convenience, there is a lot of stuff in this system where riggs can be more heavily employed in the field. Manufacturinga is crude, which needs to be rebuilt and expanded, and they need higher prices to do so. Generally speaking, i see shale in the u. S. At the beginning. They could add another one Million Barrels. Reporter this from riverside energy, while shale has proven to be resilient, only 1. 3 Million Barrels are going to 2016 compared to the yearly average of 10 billion 10 Million Barrels. Morton we are likely to see a strong rebound in shale. The question is, over the next three or four years, how much nonopec production will have been lost . We are looking at material areas like mexico. How much will shale they got for that if prices go higher . We have a much longer leave time than shareholder projects. I am optimistic it will bridge that gap, but there are other concerns raised by the ia and some kind of gap. Yousef a healthy dose of skepticism about whether this will work and the global shale. David ingles take a look at how the market played out and what needs to be thought about in 2017. David lets start with a look back at oil industries. Oil is talk, a need for a need for hawk, agreement, below 30 per barrel. Prices have risen since. We did get the deal between Oil Producers that sent oil prices to the range we are in at the moment. Before the q1 of next year, it will be about global inflation. That is what we see the base effect come into play. That is really what people are talking about. Lets have a look at Market Dynamics moving ahead, looking at interesting relations as we enter 2017. A very interesting trend, as we noted. Let me have a look at the daily change in oil price. This will take you back to 2012. I think what it shows you his 2016 was still about a wild year in terms of price swings. Swings got exacerbated, but not as bad as 2015. For the most part we were stuck between 20. 45 and within that range, 4 to 5 daily swings were not uncommon. Sort of died down in the next year. Is your oil prices, the second one is a relation between oil price and equity. The essentially the positive relation has returned. The benchmark for using it to buy index, as we did with foreign sentiment, historically it looks like this. It is positive, this is a fiveyear chart. Historically it has looked like this. The past two years has been positive. It didnt a little bit in november dipped a little bit in november and did come back up. The thing that is positive that may not go for equities in the region if investors get skeptical, a first risk of theympliance to that deal, will go the other way. That is how things look. He has been a rocky 2016, and it looks to be a more interesting 2017. Yousef bloombergs david ingles there. Looking at the slumping oil prices, saudi arabia announced sweeping reforms this year including changes to the Capital Markets. Hear from the kingdoms finance minister in a moment. This is bloomberg. Yousef welcome back to this Holiday Edition of Bloomberg Markets middle east. Im yousef on community. Yousef gamal eldin. The new man in the job had been running the kingdoms Capital Market authority overseeing a series of reforms to open up markets to Foreign Investment. I spoke with him in september in his former role and began by asking how much money the kingdom hopes to attract. Well, as much as we can. Generally it is what the market can take, what investors are willing to put, what is happening in the region, what is happening in the world. The Foreign Investment is concerned, so it is a jersey journey. Yousef looking back to summer 2015 when the first series of reports came through, you realized restrictions for foreign investors, and there was a lot of euphoria and expectations were high. Reality is those expectations have not met been met. Why will it be different this time . D we are a bunch of entities. Diligencee doing some , asking around, but they will not put their money if they are following international entities. We are international entities. Stakeholders are attracting investors. We have an Investment Forum in new york next month we have an Investment Forum in new york and another in london to promote. Fforts on showing it is to relisten to investors and their requirements. Yousef an inclusion by the nfci would bring millions more. You think the reforms you have undertaken that you intend to do in the future is going to be enough for the emerging markets classification . Mohammed yes. We have been in discussion with nfci and other investment and did see his. Investment agencies. We are in continuous discussion with nfci. We believe discussion has taken place. Implement in 2017, should be enough to put the target markets hopefully in 2017. And then four quarters of that for inclusion. Yousef another country being buffeted by the ups and downs in Energy Markets and its own Economic Program is kuwait. Under periods of overspending, it has plenty of stuff in reserve. Now the oil minister told us this in may. [indiscernible] it is quite substantial. Yearse by the coming five it will be measures of fiscal and Economic Reforms that have been announced in the 15th of april by the degree, that after five years we will be able to come back and cover all of the gdp nominated. We will close up [indiscernible] tremendously. I know this is your sixpoint plan, you are a man of reform. My question is, a brave man enters brave reforms. You are up six points, Corporate Tax reducing subsidies and privatization. For you, what is the priority of those . I know the stakes, but what is the priority . Anas to focus on issues, i would say closing on my deficit, the financial deficit, and then i have to divest by have a more private sector coming in locally and internationally leading up to the call. And i think we are willing to do that. I believe some of the rating agencies that have just issued the ratings realize this very we haved that is why turned our existing rating, which we were happy to hear and receive this news. Longterm and the negative visions they see out of this, negative outcome vision is something we have to deal with in the coming eight months to show our reliable and determined level of doing positive firms. Yousef up next, the follow from turkeys failed to. They detract for the first time in seven years. We hear reaction from the Prime Minister in a moment. You are watching Bloomberg Markets italys. Yousef turkeys economy is failing the fallout from the failed coup, retracting gdp for the first time in seven years and the lira tumbling against the dollar. The faction in the armed forces try to take control, leaving a sustained period of political instability. Here is how the Prime Minister defended the economy after the initial unrest. He was speaking to our reporter in ankara. At an coup attempt Economic Impact on the turkish economy. Immediately cut our ratings, and that was not ethical. It was taking advantage of the situation. E have overcome a coup attempt we have struggled to keep democracy running, and these agencies should not be rushing their decision. This was saddening for us. The turkish economy did not deserve this if you look at the indicators. It is an ideological and political decision, we have no doubt about that. All we are saying to Global Investors in this has come and gone, and the national will and the will of the citizens has destroyed them fires. You can continue longterm investments. We will eliminate longterm investments before you. We have all kinds of tax incentives, investment incentives, and we are given irt to add and edit investment priority to add added investment. Is this putting pressure on the turkish economy, the currency cant deficit which remains current account deficit which remains the thirdlargest inclination . We will continue with our Large Scale Investments without putting our break on. Before the religious holidays we opened a bridge on june 30. July 26, we will have another. In the beginning of 2018, we will have the first terminal in the largest airport in europe, which will be inaugurated december 20, and we will have the celebration under the bosporus. Foundersill they the cornerstones of another bridge, the longest in the world. Turkey will continue its investment. Riad you mentioned the government would increase investments more than on social spending. That would mean it would reinforce the growth of the economy has seen dependent from government spending. Are you planning any measures beyond what you just mentioned to encourage private investment and indeed for investment rather than just bonds and stocks, but maybe direct Foreign Investment to the turkish economy . A wealth establishing management funds. It will finance largescale projects. We will go through this fund instead of the general budget which will be cleared of problems. When you became Prime Minister, you said changing turkey into a president ial system was one of your priorities. Has anything changed in that in the last week . For example, especially regarding the timeline of that change. Are you still considering a referendum should parliament not pass it as you desire . Is there a possibility of early elections . Binali early election is out of the question. I am underlining this and being very clear about this. There are some circles trying to confuse the situation saying the ex parte has come out strong after this and will have an ambush election. This is not even doing through our minds going through our minds and we dont find it difficult ethical. We have power for the next four years, and we will use that for the next four years. If anyone is trying to seize authority, they will fall on their heads again sledgehammer, and we did. From now on, if anyone is thinking about doing such a thing, they should watch their step. Why a president ial necessary, it is necessary for stability and security. Under the president ial system, there would be no one attempting such an adventure, because then an absolute political will be in charge, a weak government would include coup plotters. We have always succeeded in thwarting them. How we succeeded, because the nation was backing us. Yousef still to come on the program, egypts booster economy. The reform including a inflation surge. We hear from the finance mr. Next. This is bloomberg. We expect to use inflation gradually. We are going down to 10 . Some it is 12 30 here in hong kong. China says it intends to further relax Foreign Investment banking, futures and mining. The vice chairman of the National Development and Reform Commission made the announcement during a briefing in beijing. He said beijing wants to encourage Foreign Companies to list and issue stocks in china. Culture and rethink the way it does business with global uncertainty in 2017. Shenzhenold staff in that it has risen over 32 in the last months, reaching 75 billion things to Strong Performance across all of the business platforms. Bailout of the world oldest bank has won the green light from brussels. The European Commission will use public money to rescue this bank to the tune of more than 9 billion. Lenders are struggling. Japanese Prime Minister shinzo abes Approval Rating is at a threeyear high following his visit to pearl harbor. That is from a survey. 64 , butsix points to 84 agreed with the decision to visit pearl harbor, 9 opposed. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Lets get a check on how the markets are trading in the asiapacific today. Here is david. David the last few hours of trade, we have the last few shots of 2016 in japan. It is interesting the last few minutes or so. We are as of now, looks like we are ending this year on a fairly bright note. But the has done for japan and hong kong, it managed to edge upwar