Oil prices may drop: Kudrin
Russian Finance Minister Alexei Kudrin said oil prices might drop as low as US$70 a barrel, reducing investment into the world’s largest crude producer. The price of oil, Russia’s biggest export earner, might fall to within US$70 to US$90 a barrel in the next few years, slowing flows of capital into the country, which derives about a quarter of its economic output from energy sales, Kudrin said on Saturday at an economic forum in the Siberian city of Krasnoyarsk. As oil prices fall, “capital won’t be coming in so quickly,” he said. “We will need to look for investments through an improved investment climate and through ensuring the stability of our macroeconomic policy.” Brent, the oil blend that underpins prices for Russia’s Urals crude, has climbed 1.5 percent this month to a two-year high of US$104.52 a barrel last week as unrest in the Middle East stokes concern oil-supply routes would be disrupted.
Osborne supports BOE
Chancellor of the Exchequer George Osborne said the Bank of England (BOE) is right to look beyond accelerating inflation and maintain interest rates at historic lows to bolster the recovery. The Treasury’s effort to reduce the deficit in part by increasing value added tax has added to consumer prices and the central bank should focus on price stability further in the future, Osborne said. The bank last week said inflation, already at a two-year high, will quicken further to about 4.4 percent before easing by the middle of next year. “Any monetary authority and, certainly one with the competence and capability of the Bank of England, can see through temporary increases in price levels and look to permanent threats to inflation,” Osborne told reporters in Paris following talks with G20 finance ministers yesterday.
BHP Billiton eyes takeovers
BHP Billiton Ltd CEO Marius Kloppers yesterday said takeovers are on his agenda even after pledging to spend US$80 billion on BHP’s own projects. Regulatory concerns are impeding iron-ore takeovers by the world’s largest mining company, though BHP’s potash, copper and oil and gas businesses aren’t constrained in the same way, Kloppers told the Australian Broadcasting Corp. Reporting record first-half profit, Kloppers last week unveiled a program to develop BHP’s mines and oil fields after three investments worth a total of more than US$100 billion were knocked back in the past four years. Still, he said, while surging commodity prices have led to some “very high” asset valuations, those conditions may not last. “Cycles change,” Kloppers said on the Inside Business program.
Haneda Airport adds routes
Tokyo’s Haneda Airport boosted its international connections yesterday as three new routes were launched linking it to London, New York and Detroit. British Airways PLC started operating five flights a week between Haneda and London Heathrow Airport, while an American Airlines Inc plane left for New York’s John F. Kennedy International Airport on the return leg of the inaugural daily round-trip flight. Delta Air Lines Inc also launched its regular Haneda-Detroit Metropolitan Wayne County Airport service. Haneda is just 15km from Tokyo’ city center, but has been used mainly for domestic flights since the 1978 opening of Narita International Airport. Delta was due to start up another route between Haneda and Los Angeles International Airport early today, taking the total number of foreign connections to 16.