04/12/2015 World Business Report

Can OPEC find a way to pump up the price of oil?

Villagers count the cost of Brazil's worst environmental disaster.

Good morning, Britain, hello, world. Lots going on. How much time have I

got, Simon? Nine minutes, 14. That's what you give me and I will give you

an exciting snapshot of all that is in the world of business and money.

Turbulence runs on the market and we will talk about the Brazil

environmental disaster. 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, certainly the most powerful - Saudi

Arabia's oil minister Ali al-Naimi. 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 that 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, they The result - the lowest oil prices

in more that 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? Listen to this. After the last 12

months when we've been seeing the oil price moving sharply lower, but

obviously with great stresses in terms of the fiscal positions of a

number of those oil producing countries, I would not necessarily

expect Saudi Arabian authorities to change tack at this juncture.

Certainly, they will want to continue to guarantee their market

share, which will suggest that unless there is a co-ordinated move

by the other OPEC members, then I think we will see production remain

at their mother levels into the start of 2016. -- current levels.

Miswin Mahesh is an oil analyst at Barclays.

We appreciate you joining us at this time. Can I start with that? We keep

hearing that Saudi and the others go, no one wants to cut production

because they will lose market share. Explain that to me. It is a

small pie given oil demand is not growing as wrong we as it was last

year. They are all fighting for that small pie. Saudi Arabia know that if

they cut they will win on price because prices will go up but they

will lose market share. Someone will come in and take it. Russia or the

US producers might fill in the market share. Saudis are the lowest

cost producers, so they are saying, why should we cut? OK, there you go.

With the low price of oil, is it so much a nobody is cutting story, or

is it a US fracking success story? It is the latter, I would say, with

the US growing 1 billion barrels per day, which is a significant trunk,

and more than demand -- 1 million barrels. No one else is willing to

reduce. It is a story of how successful US jail has been. I am

also wondering, we have seen not only oil but commodities across the

board drop off the price Cliff -- shale. Copper, aluminium, iron ore,

it is all downhill. Art that prices of commodities like the weather? It

is cyclical -- cliff. We are at the bottom of the cycle. Very much.

Producers of these commodities have brought onto many products, more

than they anticipated demand to grow. And we've seen a slowdown in

China which is a big consumer of all of these products, which is part of

the reason for the mismatch in demand and supply. There is a huge

gap and that is affecting prices. You have told me you are excited

about this meeting today. Will a deal be done? Will they agree to

cut? I don't think so. Some members like Venezuela want to see a cut.

This is how they go into the meeting. All of them are sitting

around the table. Venezuela will say that we need to cut and they will

point at Saudi Arabia. They themselves are not ready to cut.

That is difficult for Saudi Arabia to be in that position because they

can not be the only one shouldering the responsibility. And Saudi Arabia

wants Iran to cut. Iran are going, we have been out of the market! It

is unfair for some members, Iran and Iraq, to be asked to cut. Saudi

Arabia has set the bar high by saying they are not ruling out a cut

but the bar is high because they need conditions to be met, and they

want Russia and Mexico to cut, which is difficult to get. None of them

want to cut because prices are low. I have to wrap it up.

Now to what Brazil's government is calling the country's worst

Saturday will mark a month since a dam operated

by mining firm Samarco, co-owned by BHP Billiton and Vale, burst near

13 people died and eight are still missing in the

huge mudslide that engulfed the town and flowed into the river Doce.

But authorities are demanding reparations

from the mining companies that could add up to $5 billion.

The BBC's Daniel Gallas has been to a beach community 500 kilometres

downriver to see what effect this disaster is having

Searching for fish in a sea of mud. Sporting venues to be easy before

the mining accident that turned the waters of the speech red orange. Now

only research is equipped with radars are allowed to look for them.

Fishing has been banned while tests are carried out to determine whether

the animals here are fit for consumption. The red dots on the

screen are fish that are still alive under the mud. The president of the

local fishing association is devastated. He had big plans. His

union was building a new shop to sell high end equipment for its

members. Now he is thinking of turning it into a house or a shop.

He fears it will be years before his fishing grounds returned to normal.

TRANSLATION: The river Doce is over for all fishermen. I have 68

fishermen I am responsible for. They have families. Children in school.

Bills to pay. How will they find money. This is where the river Doce

meets the ocean. Nature and surfing attracts thousands of tourists every

year but not any more since bathing was banned and no one wants to come.

This surfer moved here two years ago and spent all of his savings

building this hostel. Summer and holidays are where the tourism

industry gets virtually all of its revenue. TRANSLATION: This summer

was the -- supposed to be the best for the business. All of the summer

bookings have been cancelled. One month on from the disaster and there

still is not an accurate estimate of how much it will cost to recover the

river Doce. Authorities want the mining giants BHP to create A5

billion dollar fund to help the environment and local economies

affected -- eight $5 billion fund. They are in talks to compensate

those affected in the industries but residents don't want just money,

they want answers too. TRANSLATION: We've no idea how long this

situation will last. No one has been able to tell us what the problem is.

We are left like this. It may take months or years. Everything this

small beach community had it owed to the river Doce and to the sea and

now both are contaminated. No one knows for sure just how harmful this

mud is which came from the mines operated like BHP and Samarco. But

what is clear for everyone is that fully recovering the river, the

environment and the local economy is something that will take a long

time. Let's have a quick flash of the

markets. We can see it it of a slump. Keep across me if you can, so

to speak... LAUGHS. James, stop it!

Don't forget you can get in touch with me and some of the

I will be back soon to look at the papers. Goodbye.

The Forth Road Bridge has been closed indefinitely after defects