When OPEC decided on Nov. 27 not to reduce production below a nearly 3-year-old cap of 30 million barrels a day, the losers were producers such as the United States, whose boom in shale oil requires expensive extraction methods, and Russia, whose economy relies perhaps too heavily on energy. Even OPEC members will see losses of revenue, especially those outside the oil-rich Persian Gulf.
The effect on China, though, is mostly beneficial. China doesn’t make money on oil, it buys it, relying on imports for almost 60 percent of its domestic oil supply, and is the world’s largest net importer of oil. And the lower the price of oil, the more affordable it becomes for China to develop its economy, which is now in a period of slow growth. Continue reading
Global finance chiefs may have denounced it, but that has not stopped Japan joining other central banks in driving its exchange rate lower. With Australia and South Korea forced to respond, will the Asia-Pacific region be the main battleground in a global currency war? Continue reading