18/06/2014 World Business Report


18/06/2014

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behind to defeat Algeria 2`1. South Korea and Russia ended 1`1.

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Now this time for the latest financial news.

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Watching the oil price as the turmoil in Iraq intensifies. Experts

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warned the crisis could destabilise energy markets.

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And the boss of General Motors faces a grilling in Congress just days

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after the car giant announces another damaging recall.

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Welcome. You are with World Business Report. We will also find out if

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casinos are a solution to Japan's economic woes. Financial markets are

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watching events in Iraq, where the biggest oil refinery has been shot

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down and foreign staff evacuated. The uprising by Sunni insurgents

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threatens Iraq. This is a one`month chart of an illustration of the

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swift reaction to the events in Iraq. About 4% rise last week. It

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was a similar story for Brent crude. The prices have stabilised a

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little. Iraq's oil refineries in the south have so far escaped the

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fighting. But many are wondering, how long will that last? I am joined

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by an energy analyst. . Good morning. It is difficult to predict

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what will happen next in Iraq and how bad the situation will become.

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Naturally, markets are very sensitive. What will happen next? We

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have seen risk premium return to the oil markets, just as we did when the

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searing crisis was at its peak. `` Syrian. If Iraq stabilises, we will

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see the risk premium full`back. If supply is disrupted and Iraq is a

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significant producer there is a potential for a spike. That is key.

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Iraq is an exporter, unlike Syria, Libya, other areas that have been

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through serious unrest. This is the biggest disruption for the market.

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Iraq is the second`largest OPEC producer. It is a significant player

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and the fastest`growing producer. Production is forecast to double by

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the end of the decade. That supply is needed to meet growing demand

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from the Asian economies. Both in terms of the near`term and the

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medium`term in terms of where the country can meet the prevention

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target. One of BP's top economists has been warning that this

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particular event could be destabilising. To what extent do you

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believe, given the fact that in the United States they are managing to

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produce a lot of their own oil because of the shale gas fracking,

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how difficult things become? We have seen the effect of the Arab spring

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offset by rising oil production. Libya was previously a significant

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exporter. But Iraq would shift the balance. If Iraq's production came

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flying, that would be a significant gains. There is no way countries

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like the US can fill the gap. How high could the price go potentially?

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Certainly we would expect prices to go above $120. It depends how

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significant the impact is. There is the potential for a meaningful price

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spike beyond that. Possibly over $140.

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Thank you for your perspective. We are keeping a close eye on that. Let

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us talk about the chief executive of General Motors. He will be in

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Washington today, facing tough questions from US lawmakers. She

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will be appearing before a congressional subcommittee, looking

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into GM's recall of 6.5 million cars for an ignition switch defect. A

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malfunction that has been linked to at least 12 deaths. While the number

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of recalls loan this year is close to 20 million, it is not the only

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automaker that has been recalling colours. Ford and listen have also

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recalled millions. How big is the problem for the industry?

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Michael normally drives a cobalt. The car he is driving here was a

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letter from General Motors. His car was one of 5 million that have been

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recalled this year. All because of ignition switch malfunctions. I was

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angry. This is something that she knew about four a number of years. I

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have two young daughters. `` they knew about four. Although General

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Motors has recalled more cars than it sold last year, it is not the

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only automaker sending customers recall notices. Recalls up.

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Surprisingly, that has not hurt sales. Americans are buying cars

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again. And in record numbers. For many car makers in the US, May was

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their best month in years. So much buying is tied to the economy as a

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whole. That is why a lot of time is buying is not going to react closely

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to these recalls. If there is momentum, people want to buy a car,

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people want to buy a car. When General Motors's CEO faces US

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lawmakers on Wednesday, this recent set of recalls is raising some

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serious questions for America's biggest car maker. How widespread

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are these safety issues? Japan's lawmakers are starting

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long`awaited talks today on a bill to lift a ban on casino gambling.

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Some say Japan has the potential to become one of the largest gambling

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market in the world. Shinzo Abe says it will be the highlight of his

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growth strategy. Is this a bit of a gamble? Will it pay off?

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A big gamble that could result in major returns for the slowing

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Japanese economy. A research paper says that Japan's potential revenue

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from gambling could reach $40 billion. If you compare that to Las

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Vegas, that is six times the strip's $6.5 billion total. It could

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become Asia's second`largest gaming market after Macau. Currently it

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allows betting on horse, bicycle and addresses as well as pension go. But

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it is not enough to boost the economy. Another industry that would

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be impacted is the reason. The Prime Minister is hoping on casino resorts

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to attract travellers from overseas. `` tourism. 2020 is the year that

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Tokyo is hosting the Summer Olympics. They are hoping that

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gaming will be a positive catalyst for the economy.

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The Canadian government has approved controversial plans for a new

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pipeline linking Alberta to the Pacific Coast that will allow it to

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ship oil to Asia. The northern gateway pipeline will transport more

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than half a million barrels of oil per day from the oilfields. It is

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expected to cost over $7 billion to build and is strongly opposed by a

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large number of environmental groups and Canadian aboriginal peoples.

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A bill that would make California the first state in the United States

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to require warning labels on sugary drinks has been defeated. It was

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rejected on a 7`8 vote on Tuesday as Democratic lawmakers doubted whether

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a label would change consumer behaviour. It needed ten votes to

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pass. The oil price has gone up again

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today. We have talked about that. The Federal reserve will end its

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meeting looking at the world economy and the US economy and the decisions

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on interest rates and also whether it will pull back on stimulus

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further. That is all from me for the time being.

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The number of young people being admitted to hospital with Crohn's

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disease has soared by

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