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This is Business Live from BBC News, with Aaron Heslehurst and
The Organization of the Petroleum Exporting Countries gather
in the hope of answering the big question - will they, or rather,
can they, do anything to reverse the slump in the price of oil?
Live from London, that's our top story on Friday the 4th of December.
With oil prices at record lows, all eyes are on Opec king-pin Saudi
Arabia, under huge pressure to cut production and revive crude prices.
So far, the oil-rich nation has refused to budge.
Is Yahoo on the brink of breaking up?
Bosses have been locked in talks over the future of the
The Asian markets were tracking south, we will explain why.
And it's Friday, so we are joined by our guru of all
He's going to be taking us through hugely important US jobs numbers.
They are the last piece in the puzzle that economists have
been waiting for, ahead of perhaps the biggest central bank
Will December 2015 be the time the Federal Reserve starts raising
We always like to know what you think of the stories we're covering.
We start in Vienna, where ministers from the oil cartel Opec are holding
The big question - will they, or rather can they,
do anything to reverse the slump in the price of crude?
Here's perhaps the key person around that table,
Saudi Arabia's Oil Minister Ali al-Nieemi.
He was mobbed by journalists yesterday as he arrived at the
meeting, after a report that Saudi was proposing a cut in production to
Let's take a look at the background to all this.
Here's what has happened to the price of US crude over
The graph tells the story - it has more than halved in value.
Because there is a massive worldwide glut of oil.
Demand has gone down, but Saudi and others have still been
The theory is they want to hang on to market share, and force those
newcomers to the market, US shale producers, out of business.
The result - the lowest oil prices in more than six years -
Smaller Opec members like Venezuela are now really struggling
They have been putting pressure on Saudi Arabia, the world's
biggest oil exporter, and its Gulf allies to cut production.
Saudi Arabia may at last be willing to cut production, but only if Iran,
Iraq and other non-Opec members like Russia agree to cut as well.
So, is there any possibility of a deal?
International Oil and Energy Consultant Dr. Manouchehr
I know it's Fiona, I realise it's December, but there is a real chill
in the air -- it's FENA. There is a real disquiet. Can they agree today?
I don't think so. I think the argument that the Saudi minister
will so, this strategy is already working and has started to be
effective. US oil production, shale, is coming down and so on. Because of
the low price, demand is picking up. They will say, wait another six
months or another year. But of course others cannot afford that,
because they are under pressure in this one last year. Even Saudi
Arabia, there are some of the high authorities, printers, complaining.
The 700 reserves have gone down to 600 or so -- Princes. They are in
the open market. They want to get their bonds and loans and so on. So
there is pressure. But overall, I don't know what is happening in the
discussions, but I think they will not budge. I think they will
continue this strategy, in spite of so much pressure, Venezuelan,
Nigeria, they are really suffering, they have had enough. The Saudis are
saying, we will cut if Iran, they put pressure on Iran and Iraq, Iran
will just enter the market after being locked out last year. Iran
doesn't want to cut, they want to get the stuff and sell it. Iraq say
that for 20 years they were under sanctions, they deserve to trade.
Let me add something, there are pressures from within Opec, on
previous occasions, in the 1980s, there was also pressure from the US.
George Bush, the vice president, President Clinton, they went and put
pressure on Saudi Arabia to cut. This time, there is no US pressure,
it is only within the internal Opec pressure on Saudi Arabia. And I
don't think they will budge, I think they will wait six months or one
year, that is their demand. There is already an effect of this policy.
But of course it is long-term. It is two or three years before they
actually see this 12 million barrel cut in investment for expulsion
production in the industry -- expulsion. Can I ask you one more
question? Given the disagreements between members of Opec and of
course the Shell gas production, is in your future Opec still a really
relevant player in the oil industry? Of course, it is more than
35% of the market, and the oil is theirs, they have been through this
and they see the fate of other producers, so they want to be in
charge of their own. They don't want to be left at the mercy of the
so-called market, and there are people in the US campaigning for
fair trade, price, to purchase and so on, priced that somebody else
will defend fair price. But they know that. In spite of all of this,
the ministers are responsible, they know that they have something to
do,. Thank you very much for coming in and taking us through that.
Let's take a look at some other news for you.
A US judge has rejected a bid by the airbag maker Takata
and the car maker Honda to end a class action lawsuit.
The case had been brought on behalf of millions of owners of cars with
Over 19 million US cars have been recalled
Takata and Honda have already agreed to settlements for six of the eight
deaths linked to ruptured Takata airbag inflators in Honda vehicles.
And South Korea's financial regulator says it is investigating
possible insider trading by Samsung executives.
It is being reported that nine Samsung executives purchased
as much as $43 million of stock in a takeover target before Samsung
announced a deal to combine with the company in May.
You've got the tablet! I do. Let's have a quick look.
Let's take a look at the Business Live page.
This story took our fancy, handbags at dawn at Avon. They are a huge
provider of cosmetics, particularly in the US. They are looking to sell
their North American division, but there are investors are claiming it
is significantly undervalued, and they have spoken to the chairman and
told them that they do not have to be selling, but they have in fact
lost confidence in the leadership. You a handbag lady? No, I'm not, you
never see me come in with a handbag. I have deep pockets! This is called
filling time by the way, ladies and gentlemen!
Let's take a look round the world at what's business stories are
We'll start in Asia, where Leisha Chi is in Singapore for us
with news that Toshiba is planning to spin off its PC business.
Does Toshiba want to get rid of its PC business? That's right, there are
rumours that Toshiba is looking to split off its arm unprofitable PC
business, because it is losing money but also because the Japanese
company has been embroiled in one of the country's biggest accounting
scandals in years. The firm needs to raise cash and reassure investors
about its finances. It has been reporting inflated profits after
nearly seven years of improper accounting. Toshiba has been selling
off businesses and losing money. It has merged with former rivals.
Toshiba used to be a pretty big brand name back on the day. But fast
forward now, it only holds about 2% of the global PC market. Apple holds
20%. It is going to be hard for them to catch up on the road. Talking of
catch up, have a great weekend and we will talk to you soon. Thanks for
that. Let's stay with the markets. Asian markets joined the global
market slump this Friday, and all to Yes, it acted,
and this is the result. The long-awaited announcement
from Mario Draghi, the ECB boss, was seen as a huge let-down, as the
bank crucially failed to increase the size of the stimulus while the
rate cut was less than hoped for. Although I will tell you
the euro jumped by more than 3% late yesterday
because of the ECB announcement. In fact, the euro posted
its biggest single day gain against Talking of dollars,
let's find out what will be making All eyes will be
on November's job report. It's the last one before the Fed's
highly anticipated interest-rate It is expected to show that
non-farm payrolls increased Now, that would be less than gains
seen in October, but still healthy and in line with
an unemployment rate of The report is also predicted
to show that wages grew. Another piece
of economic data out is US trade-deficit figures
for October. The Commerce Department will likely
report that the trade gap shrank And after markets reacted negatively
Thursday to the European Central Bank's stimulus plans,
we'll hear from the man himself, He'll be in New York to participate
in a meeting of the Economic Club. We'll hear him react to criticisms
that the European Central Bank That is of course the big issue that
faced the markets yesterday. We have a guest with us.
is co-founder and director of Seven Investment Management.
Can the ECB fix the Eurozone's problems? The Eurozone is actually
doing quite well, I know what the headlines say, but we have seen
confidence indicators rising and better corporate results. Generally
we have seen an improvement. Yesterday the euro jumped
dramatically. Overall it has been considerably weaker. What we saw
yesterday was a market showing a certain level of addiction to
quantitative easing. Somebody is not giving them their drugs any more,
what happens? The market goes down like that. This will come back the
other way. What you will see I suspect is about is back from that.
This was completely overdone, it may not be done today, but really that
form did not represent any logic at all because we were using
extending, the deposit rate going negative further, he was providing
more things to buy, extending the period by which it would operate,
all of the things, he just didn't give them any more methadone, that
is what the market was looking for, then it went into his. I want to
talk about miners and commodities, but the bullies in our ears are
saying there is no more time. You will come back and take as through
some of the papers. Thanks, Justin. from the world's biggest economy,
US jobs data - the last bit of the economic jigsaw
for the Fed before it decides
on where interest rates will go. You're with Business Live
from BBC News. It's time for us to look at some
of the stories from around the UK. Rail fares for 2016 have been
announced, and our very own Ben Thompson is at King's Cross
station in Central London. And the lowest rise in fares
for six years. Yes, good morning, guys, welcome to
King's Cross, one of the busiest stations here in London. 30 million
passengers will travel through here during the course of the year. This
morning they have been keeping a close eye on the news that rail
fares will go up in January. They will go up by 1.1%, that is the
lowest increase in six years. Now, it's based on what are called
regulated and unregulated fares. The regulated ones, ones that are
limited by the government, they are pegged to the inflation rate in
July, they go up by 1%. Unregulated fares are set by the companies
themselves, they can vary, but on average they will go up by 1.1%
across the country. We have been speaking to passengers here this
morning who said, we see the need for prices to rise, but in they
wanted improvement in the service, they want to see fewer delays are
better trained and less overcrowding. I've also been
speaking to the rail delivery group, responsible for the rail
companies themselves, and also Network Rail. They pointed out that
more and more money is now being invested in the railways, more of
every pound spent on the services themselves.
I think the increase of 1.1%, in return they want to see the service
improved. Ben, great stuff, thank you! Every Friday year somewhere
else! He has got a very busy weekend
ahead, he is moving house. We will give you the address a bit
later! Weatherspoon say an old website belonging to them has been
hacked, personal details including e-mail addresses may have been
stolen. They say a tiny minority of customers with extremely limited
details were accessed, plenty more on the website.
our top story - a crucial meeting in Vienna.
meets in the hope of answering the big question -
can they do anything to reverse the slump in the price of oil?
That is kicking off at nine o'clock, so plenty more throughout the day.
Later today, the US will release its latest unemployment numbers
Today's numbers are significant because since October,
Fed policymakers have signalled they're likely
to raise interest rates at their meeting that starts on the 15th.
of significant economic data they'll review.
So what kind of number could raise doubts about a Fed move?
Our economics correspondent Andrew Walker is with us.
Good to see you, Andrew. We are expecting a good number, but if it
is anything over 200,000 for the month of November, jobs created,
Janet Yellen, a couple of days ago, very positive with their comments,
they are going to raise rates, surely? It certainly looks like they
are going to do it at that meeting later this month. The US jobs market
is pretty robust, we have unemployment at 5%, we are expecting
no change later, and we are expecting something of the order of
200,000 as an increase in the number of people who do have employment.
Over the course of the last 12 months, we have seen the number of
people in work raising by about 2.8 million, so no question that the US
jobs situation is moving in the right direction. Not quite as robust
as the headline figures suggest, however, an awful lot of people are
not looking for work because they feel it will be a struggle to find
it, and a lot of people working pastime would like to work longer
hours. If you look at the overall participation rate, it is quite a
bit down from where it was before the recession. That is partly about
the ageing population, but not the whole story. The kind of figures
that the United States has would be the envy of folks on continental
Europe, the eurozone we were talking about before. There is this issue of
wage growth, not particularly strong in the US, I wonder how much that
plays into their thoughts. It is an important factor, because the key
thing that will lead the Fed to raise rates is concerned that maybe
there might eventually be an inflation problem. There certainly
is not one at the moment, even when you take out the effect of very low
oil prices and the effect that has had on what it costs motorists to
fill their cars. Core inflation is still pretty low in the United
States, about 1.3% is one of the key figures that the Fed likes to look
at, and they have a target of 2%. But nonetheless wage growth, yes, I
mean, it is not very robust, but there is enough going on to suggest
that, with these very low-level is of unemployment, that there could
conceivably be a problem in due course. So I think the Fed does
think now is the time to start very gradually raising interest rates. If
we do see a rate rise, it is going to be a small one. A little mini
one, a quarter of a percent? It is a tale of two very different
economies, so to the eurozone, we saw the action by Mario Draghi, the
ECB yesterday, but is there still too much expectation that it is the
job of the European Central Bank to fix the eurozone problems? It is
not, is it? They have got a role in ensuring that there is sufficient
demand in the economy, but it is not entirely down to them by any means.
There is still, if you ask Mario Draghi himself, he will tell you
there is still an enormous agenda of structural reform in labour markets,
in promoting more competition in services and industries. He will
tell you there is still an enormous job to be done there on the part of
eurozone governments. He also, I think, probably takes the view that
some of them could do a little bit more by way of fiscal policy,
spending and taxes to stimulator economic growth. But that has become
a rather heretical idea, the eurozone is still very much consumed
by this idea that you do need to maintain very fierce discipline over
government finances. Some have serious problems with that, most
obviously Greece, but there are probably some that could go a little
easier without doing any great damage, and I think Mario Draghi
thinks Germany could do that without any great danger. Very briefly, we
have seen persistent strength when it comes to the euro, a real problem
for lots of the countries across the eurozone, particularly Germany,
difficult for exporting nations, and what we saw yesterday with Mario
Draghi disappearing gait disappointing the markets, it was
strengthening again. Yes, but the medium term trend has been a
weakening euro. One of the things they want to see is the euro
remaining relatively weak, so as long as Justin was right to say that
that strengthening is a temporary affair, an overreaction, I think
they can probably live with it, but we will be watching it carefully.
Thank you very much for coming in. We got a tweet from Alexander, he
says all oil economies are hurting, often not mentioned, Norway. You can
get in touch with us as well, this is how you can get in touch with us.
The Business Live page is where you stay ahead with all
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get involved on the BBC Business Live web page at bbc.com/business,
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Business Live on TV and online, whenever you need to know.
Justin is back, he will be taking us through some of the papers, in the
Economist they are talking about Yahoo and what now for the boss?
This was a great brand 15 years ago, completely overtaken by Google, so
as a search engine it is almost irrelevant, and its biggest asset is
its investment in Ali baba. There is a private equity firm involved in
that, and we know what they are like, nice reasonable people! No,
they want to get their money out of this. Unfortunately, we have got the
dear lady running it, Marissa Mayer, and she has joined to try to revive
the business, has not been able to, so I would not be surprised if they
sell off some of the assets and probably you will end up with this
rump of the Alibaba business which would give them an awful lot of
value. In the New York Times, is there a
shortage of Secret Service men?! So it would appear, I know all about
the US Secret Service, I have seen those Harrison Ford films, they
worked really well, they are highly efficient, and this is someone
called Mr Chavez, I thought he used to run Venezuela... I assume it is
not the same man! Misconduct continues, security breaches
persist, this is not what you expect from the US Secret Service, guarding
the president, but we had a breach of White House fences last week with
strangers getting into it. This would seem like amateur week at a
time when everyone else is spending a lot of money on extra security,
this sort of story. Very strange indeed. Yeah, I wonder what sort of
misconduct they get into. Who knows?! Probably a state secret.
I think that is it, I'm afraid, sorry, Justin, that is it from
business life. There will be more business news
throughout the day on the BBC Live web page
and on World Business Report. See you later, have a great weekend,