18/12/2015 World Business Report

The US prepares to end its 40-year ban on exporting oil.

But the question is, will it find anyone to buy it?

Plus: Chennai counts the cost, more than 300 dead,

and hundreds of millions of dollars' worth of damage.

But could the flood disaster in India's industrial heartland

I've got about nine minutes. You give me that and I'll give you a

fascinating and exciting snapshot of all that is going on in the world of

business and money. We will talk about more measures to boost the

Japanese economy, at first let's start with what could be a historic

day for America's oil industry. We start with what could be

a historic day For 40 years it has been banned from

exporting crude oil, to protect But later today the House

of Representatives is expected to lift that ban, as part of

a massive government spending bill. The ban was imposed in 1975,

at the height of the oil crisis. Opec introduced an oil embargo

after the US sided with Israel The result, oil shortages,

soaring prices, A lot has changed since then,

most importantly the US boom in US oil production has

soared 80% since 2008. It now produces 9.2 million barrels

per day, half of it from fracking. That makes it

the world's number three producer, The problem of course is this,

timing. There is already a global glut, the

world is awash with oil, prices are at seven-year lows, and a flood of

US crude will just make it worse. Still, the speaker of the House

of Representatives argued this week Ending the 40-year ban

on oil exports, do you know what that does for our foreign policy,

what that does for job creators, It's permanent policy, that's good

for American foreign policy, For temporary measures,

I think that's very, very good. He is very pleased indeed. Let's get

more. Neil Atkinson is head of analysis

at Lloyds List Intelligence. Always a pleasure to see you, thanks

for getting up at this time in the morning. Who is going to buy... I

know the timing is not great. I was looking at shipping for example.

Shipping oil from Saudi to Japan takes 27 days. Shipping oil from

Houston to Saudi takes 48 days. More expensive. Who is going to buy at?

We shouldn't get too carried away. Although this is a historic step and

it is something that should have happened a while back and it is

hugely important, it does not mean that there are suddenly going to be

a flood of US oil sailing away from the US east coast or the US Gulf

Coast looking for customers. Because as you say there is already a glut

of oil in world markets. World oil demand growth next year is going to

be less than it was in 2015. It is more of a historic step in terms of

a free trade issue. Every other oil producer in the world can produce

and sell their oil to whoever they wish, with the odd exception. The US

already exports, and this seems to be a relatively little at a known

fact, an enormous quantity of products. An enormous exports of

gasoline and other products. So a ban on exporting the raw stuff, the

black stuff, but it exports... It exports gasoline, diesel in enormous

quantities. You have taken the wind out of this story altogether! This

is the interesting point. There has never been a ban on product exports

but for many, many years there was no issue with exporting products

because the United States needed all the product it could get and it used

to import oil products as well is importing crude oil. But in recent

years as domestic production has increased enormously, as you said in

your introduction a second ago, that crude oil has been bought by

refiners at very low prices, because there is a glut in the United

States. Those refiners than take the product they make in the refinery,

sell it in international markets at international prices and make a shed

load of money. Can we put the picture here, if you add the oil

from the US, next year possibly uranium oil is going to come into

the market and possibly Libyan, I keep hearing. -- Iranian oil. We

definitely have the possibility of being sold somewhere else and not

just the United States but we shouldn't be excited about a flood.

Number two, we Iranian exports almost certainly entering the market

around about the Easter period. There is always the possibility of

there being some sort of settlement in Libya between the two rival

governments that you have there. Were that to be the case and were

they to get their act together in terms of export capabilities there

would be potentially a big volume of Libyan oil entering an already

glutted market. And that will put the pressure on. We have to wrap it

up, unfortunately. Thank you. The state is

the nation's industrial heartland, home to its huge and fast-growing

auto industry, as well as other In recent weeks,

you will remember these images, it has been devastated by floods that

have killed more than 300 people. The cost to

the economy is expected to run into Sameer Hashmi has been to the state

capital Chennai to report on the clean-up operation, and growing

questions about whether the city The rain has stopped, and now it's

time to try and salvage what they can. At this paper company they are

trying to get stock to a dry location, away from the flooded

factory. Diaries, calendars and stationery were all made here. But

most machinery and even the office furniture is ruined. TRANSLATION: I

have incurred a loss of nearly $40,000. We cannot take any orders

now. All the customers I hard have left us. Now we need to start from

scratch -- I had. After all of us struggle to run this factory,

absolutely everything is gone. I have no idea what I'm going to do

next. Now, you'll find all sorts of small businesses here from producers

of car parts and pharmaceuticals the exporter 's and rubber processing

factories. These unprecedented floods

me that they have no idea how long it will be until they can

country and a major contributor to India's economy. Global car

companies like Ford and BMW have factories in the state and so

suppliers like this one have base themselves here as well. It a lot

also India's second biggest hub for IT firms. Questions are now being

asked by how so much damage was caused by just a few days of heavy

rain. Some experts say it is because the city, like many others, has been

developed without much thought given to the environment. Immediately

after every severe weather, there will be a response, but that is not

good enough. We need a plan in place and best practice around

investment. It is very important, good data. We are very much lacking

in that. For Chennai and other parts of Tamil Nadu, it is going to take

months for its people and businesses to pick themselves up and get back

to normal. But the bigger question about how to improve infrastructure

to make sure natural disasters have less devastating results will take

much longer to clear up. Let's head over to the Singapore

office, talking about Japan's Central Bank. What have they done

this time? They boosting the economy? Well, well, Aaron, a

surprising move as you say but not involving interest rates, which

continue to remain near zero. They have essentially introduced a new

programme supporting companies actively investing in the economy.

They have also started to tweak it on the buying programme. Basically

this was the last meeting of the policy makers -- tweak its bond

buying programme. Firms dedicated to capital investment, as they put it,

companies which are proactively investing in physical and human

capital. Of course we know that the government and the central bank have

been urging companies for months now to invest more but there has been

very little signs that these companies have been using their cash

reserves which are at record highs. The central bank is mention made

some other tweaks including plans to buy slightly longer term the

Japanese lines starting next year. They also expanded the type of

assets they are buying including purchasing more risky assets. All of

this saw the Nikkei rising briefly on that news but it has since fallen

back and looks set to end the week flat. Great stuff, we are running

out of time. Thank you. We will talk to you very soon.

Don't forget, you can get in touch with me