18/04/2016 BBC Business Live


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This is Business Live from BBC News with Ben Thompson and Sally Bundock.


Oil prices fall again as the world's biggest producers once again fail


Live from London, that's our top story on the 18th of April.


There were high hopes that the world's top oil producers


would finally agree to cut production to prop up prices.


But there was no deal and it's sent prices even lower.


We'll find out why - and what it means for us.


The world's major steel producers meet to tackle


the massive oversupply - and how to deal with floods


And commodity prices take a hit after oil


That's putting pressure on the wider market.


We meet the man behind L'Oreal's Tech team who's applying


new ideas to solve age old problems, like this patch that tells


you when you've been in the sun too long!


And the British Government claims that leaving the EU would cost every


UK household over $6,000 a year in lost income.


So we are asking you if a few thousand dollars


would swing your vote in a referendum on how your


Hello and a very warm welcome to the programme.


There was a lot riding on this weekend.


The world's top oil producers were meeting in the Qatari capital,


Doha, to thrash out a deal to stabilise oil prices.


There was no agreement to cap production, saying they


That statement was enough to tip oil prices down another 5%.


At the moment, more than 1.5 million barrels of crude are produced every


That is surplus supply, according to the International Energy Agency,


It says that oversupply will fall to 200,000 barrels per day


But the agency says freezing at current levels would have limited


impact, as both Saudi Arabia and Russia are already pumping


And Iran is unlikely to agree to a freeze,


as it wants to boost production to the level it was at


before international sanctions were imposed.


That's about 4 million barrels a day.


Saudi Arabia - the key player in all of this - had counted


on rock-bottom oil killing off America's shale energy boom.


But America's frackers - although they've been hit -


are proving more resilient that Saudi thought - and investors


are actually putting money back into shale once again.


Harry Tchilinguirian is the Global Head of


Commodity Markets Strategy at BNP Paribas.


He joins me. Good morning. Thank you for coming on. I wasn't surprised to


hear there was no agreement. Your reaction? Equally so. I think we had


a meeting here that was no starter from the beginning. We had two


countries pitted against each other, the Middle East and rival Saudi


Arabia and Iran. Saudi Arabia made it clear they wanted collective


action, everyone including Iran. The position of Iran was there was no


way they would not increase production because they are looking


to reclaim the market share they lost during the sanctions, as


imposed by the EU and US. Where do we go from here? I guess the market


is going to look at the current situation and see producer relations


in disarray. With producers unable to operate we cannot expect much


from the next meeting in June. At that point it will be down to price


adjustments in the market and only the price. I think from now on the


only thing to look at is what is going to happen in the United


States, with shale oil production. That is the only element of the


market that could bring balance back to the market. What price does or


we'll need to be out for the shale producers to be breaking even?


Because they have been running a loss for some time? Yes, the US


shale industry... There are very different types of basins in the US.


I would say in terms of price it would be 40- $50. Right now we are


looking for decline in US production and the real question is, by how


much? If it is sufficient, then the market will get back on its feet. If


it's not, the price will have to stay lower for longer to make the


adjustments can. Where do you think the price will be towards the end of


the year? We are looking between 30- $40, with a view that by the end of


the year, as we have some rebound in the market, we can probably achieve


in the mid-40s by year end. Thank you for your time, Harry. There is


so much more about the Doha meeting, what went wrong and what little went


right. Leaders from the global steel


industry will meet in Brussels later for crisis talks,


as cheap Chinese exports force down prices and threaten


thousands of jobs. A slowdown in domestic demand


in China, as its economy slows, has prompted Chinese producers


to sell steel abroad, The BBC's Alex Forsyth reports


from Brussels. Representatives from around 30


countries from across the world are gathering here in central


Brussels today, to discuss the crisis that's facing


the global steel industry. Overproduction, coupled with falling


consumption has caused Since 2008 dozens of plants


across Europe have closed, and around 70,000 jobs in steel


manufacturing have gone. This problem has been brought


into sharp focus in the UK by the recent decision of Tata Steel


to sell its UK assets, But there is recognition that this


is a global problem which requires which requires a global approach,


and the hope is the officials taking part in this


conference today will be able to agree a series of measures


to curb overproduction, specifically looking at the role


of governments in shoring up steel-making plants


which are producing steel Now it's significant that officials


from China are due to attend today to take place in these talks,


because cheap Chinese steel is largely blamed


for distorting market conditions, so reaching an agreement with China


involved will make this Brazil's lower house of Congress has


voted to start impeachment proceedings against President Dilma


Rousseff. The Brazilian leader is facing


allegations that she manipulated It comes as the country's economy


struggles in the wake Brazil's GDP fell


by 3.8% last year. The first Air France flight


has landed in Tehran, after a gap of seven


and a half years. The airline suspended flights


to Tehran in October 2008, as the UN On board the flight was a delegation


of French business leaders There is plenty of story, website


page today. The steel crisis. As you heard from Alex, a lot at stake with


30 nations represented. Keep across this as the page is updated, they


will update you as and when there is news from there.


I just stopped talking... It was a lottery of stories on the


live pages this morning. Also today you can see the news from Bob


Dudley. Last week we brought you the revolt of shareholders over his


bonus. BP said it misled shareholders over the pay. A 20% pay


rise was afforded to him despite falling sales, a big loss at BP and


those thousands of job losses that were announced for employees. They


say they got it wrong and have apologised.


Thank you. Let's talk about Japan now.


A number of key Japanese manufacturers have been forced


to suspended production after two powerful earthquakes hit


Electronics giant Sony, as well as car makers


Honda and Toyota say their plants have been damaged.


Karishma Vaswani is in Singapore with more on this.


As we said, some well-known names really suffering the fallout of this


devastating earthquake? Yes indeed. Thousands of people are also still


living without power and many of them left homeless. The government


is trying to deploy its resources to be badly affected areas, but as you


pointed out, it is time to gauge the cost to the Japanese economy from


this horrible disaster. A number of Japanese companies have suspended


operations since those two powerful earthquakes struck what was the


southern manufacturing hub of the affected area. It is supposedly less


prone to earthquakes in this area. This city, quite close to the


epicentre, has a large semiconductor industry. It is also home to


manufacturers like we were just talking about, Sony and Honda. They


have both said there has been damaged at their plants. Toyota says


it has suffered as well, and is suspending operations at most its


assembly plants across Japan. This suspension will be staggered but it


will last about week. That is expected to lead to a drop in


production, around 50,000 vehicles. So a real sense that the global


supply chain of these companies may be affected as a result of these two


powerful earthquakes. Thank you very much. As we heard, a human tragedy


and one where the financial impact is filtering across as well. We will


keep your Groser as news developments. But now those oil


prices over those talks in Doha failed to reach agreement. Brent


Crude Down about 5% initially, and still close to that. Light Crude


also down about the same. The next meeting is on June the 2nd but no


big hopes on any change of output. But of course, all that speculation


of a deal had led to some high hopes for banks and mining stocks. That


spill over from rising commodity prices would have helped them, but


as easy, probably going to take a bit of a hit as a result of this.


That's what happened in Asia overnight. I want to take you to


Europe, Europe just opened. No surprises, the arrows are red. More


on that in a moment, but first began head stateside with details about


what is ahead on Wall Street today. US investors will come into work


on Monday with plenty America's biggest companies


are showing investors how much money they made and lost in the first


three months of the year. Morgan Stanley,


the investment bank, is expected to show a sharp fall


in quarterly profit. Many investors have resigned


themselves to the biggest banks suffering their worst


start to the year since the It's a different story in soft


drinks or snacks, or it should be if PepsiCo


meet expectations. It seen its sales in the US


boosted, even though the strong US dollar is hurting


its overseas business. Other companies reporting


include Netflix and IBM, and that's just at the start


of the week. Wall Street is definitely


getting busy. Joining us is Simon Derrick,


Chief Markets Strategist, Nice to see you. Happy Monday. So


dominated despite what's coming later, it's all about oil right now?


It is. What we have to start thinking about is how this impacts


on broader markets. We have seen what has happened to the minors and


stock miners. We also expect to see pressure on a lot of the currencies


of oil producing nations. Interesting there is possibly a


bigger impact, and this comes from what the Federal reserve might do.


The US central bank. They were very cautious about market turmoil at the


start of the year, including weak oil prices. If they see this as


another reason for market disruption, which they may possibly


do, does this mean that they will be even more cautious about hiking


rates this year? In which case we have a very different world and


dollar to the one we experience last year. No huge surprise they didn't


come to a deal in Doha this weekend. Is this a perfect example of


mis-selling the facts? We were expecting they might pull something


out of the bag, markets were a little excited something would


happen and then you look at the numbers today... If you go back to


this time yesterday morning, all the talk was about a deal being struck.


Reports of draft agreements and perhaps there was going to be a


freeze on production. They may have been hopes lifted. I think the way


this has broken a little bit after the start of market trading in Asia


possibly caught a few people unawares. Was it a case of


mis-selling the facts? Were we really that surprised? And markets


just throwing things around? There is never a dull moment. Still to


come, global tech and cosmetics collide.


We meet the man who heads up L'Oreal's Tech team and find out


what new ideas are being used to help out with some


You're with Business Live from BBC News.


Research published by the Treasury this morning says the UK economy


will be 6% smaller by 2030, if Britain leaves the EU.


Chancellor George Osborne will say the country will be ?4,300


But Vote Leave campaigners say Mr Osborne's economic predictions


Our Economics Editor Kamal Ahmed joins us.


Kamal, how significant is this report?


Well, I have just come back from the International Monetary Fund meeting


in Washington actually with the Chancellor and I think what he is


trying to do here is just keep trying to get this fact into the


public's mind that there will be a shocking economic cost if Britain


were to leave the European Union. I think there are lots of issues with


this document. It has been done by treasury economists. It has taken


months to put together and the biggest issue is the fact that this


forecast is for 2030. Can you imagine if a forecast had come out


in 20002 about what the economy would be like today, how strongly if


we went back do the 2002 document, how clear would it be about what the


economy would be like now? This is the period that the document is


looking and it is difficult to predict by 2030 what the economy


will look like. The other issue is they are saying there will be this


contraction to the economy. Let's be clear though, this is not actually


about ?4300 costs to each individual household's income, it is a global


Figg simply divided by the 26.5 million households there are in the


UK, but the big point that George Osborne wants to make and the point


he was making at the IMF in Washington and he will be making in


his speech today, there is an economic cost, it is long-term and


it will, if we leave the European Union, permanently damage the UK. As


you say, those who say that Vote Leave, those who support us leaving


the European Union say that actually we would be more prosperous, if we


left the European Union, and also that forecasts at this far into the


future are not really worth the 200 pages that they are written on.


Thank you, Kamal. More from him online. If you want to


read more detail about the 200 page document. Full details on the live


page. Check it out now. Our top story, major


oil exporting nations, meeting in Qatar, have failed


to secure an agreement They had been hoping to strike


a deal that would limit output to try to boost prices which have


slumped dramatically Let's get the inside track now


on a digital innovation that could quite literally change


the face of an industry. Technology has already taken


the fitness market by storm with all sorts of wearable devices


and lifestyle trackers. Well, now it's the turn


of the beauty sector. L'oreal's latest innovation,


from its Tech lab in San Francisco is a wearable patch that measures


how long you've been in the sun. And the man behind it


all is Guive Balooch, And you have got one on your hand?


Yes, I do. That's wearable tech. I guess once you've got it on, you


don't know it is there, do you? It is interesting because what happened


now with wearables you have been able to take electronics and make


them so thin, you can put them on the body and they feel like a second


skin. How does it tell you what you need to know? You open the


application and you will take a photo of the heart itself and it


will let you know on the app what the level of exposure you have to


the UV at the moment and how long you have been exposed during the day


and it will tell you with a graph, the amounts of time you have had UV


exposure and at what moments you have had the highest levels of


exposure and give you tips and lifestyle tips in terms of living a


better life in the sun. I can't imagine there is much need for that


in the UK! We don't get much sun! Talk us through how you would use


that on a day-to-day basis, do you wear it over the course of your


holiday? The idea is if it is a special few days that you are at the


beach or if you want to go out on a day-to-day and your comments about


the UK, a lot of times you're getting UVA and it is cloudy outside


and you don't know the level of exposure because you feel you're not


gettingks posed. There is the bad type of UVA and the OK type, do you


differentiate? You can get a good amount of vitamin D when it comes to


UV, it is to give you education in terms of how much exposure you are


getting on a day-to-day. The education is very much needed. So


the technology itself is free so we're providing this as really an


empowerment tool to let people educate themselves in terms of the


amount of UV exposure they have and to use the products of an innovative


brand we have around dermatology and UV exposure. We talk about


technology being a new solution to age old problems, but it is


applicable across-the-board, it is about how you can technology. The


thing you've got on your hand there, it is tiny, it is really thin, there


is all the electronics embedded within it. The opportunities for the


way you do things now are, the potential is huge? Yeah, I think


that technology provides really a moment where consumers can become in


the centre of the experience. So in the beauty industry what we want to


do in L'Oreal, we are trying to be in the front when it comes to being


able to use technology as a way to empower consumers to choose better


products and to be able to use the best products for them. So I think


that this is really an area where you will see wearables, virtual


reality and augmented reality and this new tech innovation in the


middle of the consumer experience where they can empower consumers for


can yous tomorrowised choices and for better lifestyle and the


potential is really huge among the markets, I think. Now, I was asking


for another question, but I am not allowed. We are out of time


unfortunately. No problem, thank you for having me. There was so much


more to talk about, it is fascinating. Thank you.


As India overtook China as the world's fastest growing


economy, there's been renewed focus on the government's attempts


to boost investment and that push could be paying off.


The IMF has just confirmed its optimistic outlook for India,


despite much gloomier predictions for the world economy.


Here's Finance minister Arun Jaitley.


I don't think in a globally adverse situation that exists today, double


Countries can reach their target when the


global tail winds are all supportive, but when they are


But even within the present limitation of the world economy


growing slowly, volatility being there


and unpredictability being there


and commodity prices being low, I think if


we have a good monsoon and


if we are able to address several domestic reforms including


strengthening the Indian banking system which is what we are trying


to do, for us to grow over the 7.5% that we have reached is reasonably


We asked you to get in touch with regards to the story in or out of


Europe. Peter says the countries need closer union. Big question


there. Lisa says, "George Osborne sounds like he is threatening the UK


instead of offering balanced and honest information." Keep your


comments coming in. The Wall Street Journal reports that


Verizon's pursuit of Yahoo has received a boost as several


prominent suitors opted not to make Business Insider meanwhile claims


that Britain's house prices are going to soar


because there's too little housing The Telegraph looks at a study


which says that increasing regulatory interference means


competition problems are now considered to be the biggest threat


for global mergers and acquisitions. Joining us again is Simon Derrick,


Chief Markets Strategist, Where do you want to start Simon?


Shall we start with Yahoo? Go on. The lack of suitors for Yahoo, it


was only a week ago, we were talking about The Daily Mail and here we are


struggling to find buyers. It is a measure of the pace of change in


technology, it is only 10 or 15 years ago when Yahoo was the bright


and shining light. Here we are, it is nowhere and struggling to find a


buyer. Interesting time life. I seem to remember they were tied up with


one of the greatest sensations of the dotcom boom which was buying


AOL. Yahoo's results are out later this week and the deadline for bids


for Yahoo was timed before the earnings came out. Watch this space.


Let's talk about housing. This is something that surprises me. The


house price surge in the UK will get worse because builders are running


ot of land. If you get a train between any city in the UK, you see


how much spare land there, yes, some of it is green belt and some of it


is protected, but we are not short of land in the UK? You have got to


remember 60 million people in this country. Compare that to France


which is not a huge amount of difference in terms of population,


twice the land area that we have. Actually relatively speaking


compared to a lot of Continental Europe, we are a crowded nation.


Throw into this the fact that we are going to have interest rates going


nowhere fast in the UK for a long period of time, people are going to


still be looking to property as they always do in the UK as a hard asset.


I think it means further upward pressure on house prices. And upward


in terms of building. We might see more high rise rather than low rise?


That's true in London. That's been the ski story for a while. Simon.


Thank you for being with us today. That's it from us on the team. We


will see you same time, same place tomorrow. Have a great day. Bye-bye.


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