Barclays Share News (BARC)

"America is poised to become the world's largest oil producer once again ? nearly four decades after it lost the title," writes The Sunday Times. Goldman Sachs, the investment bank, has predicted that US production will hit 10.9m barrels a day by 2017, a one-third rise over its current level of 8.3m barrels a day. The surge is a result of novel drilling technologies that have opened new fields. The last time America was the biggest crude producer was 1973, when Opec, the cartel of oil-producing nations, launched its first embargo and sent prices soaring. Russia was the world's top producer last year with daily output of 10.6m barrels, followed by Saudi Arabia at 10.4m. There are doubts about the ability of both to increase production substantially. Goldman expects Russia, whose nationalistic approach to natural resources limits investment from western firms, to have raised output by only 100,000 barrels a day by 2017."George Osborne is drawing up plans for a major growth package to boost the British economy, in what critics will say is a significant shift from his Plan A of austerity and spending cuts. In what has been described in government circles as Plan A+, cabinet ministers have been told to identify big-ticket infrastructure projects that can be speeded up to jump-start growth. The move follows President Obama's $450bn (£280bn) plan to create new jobs and cut payroll taxes, and comments on Friday by Christine Lagarde, head of the International Monetary Fund, who gave only qualified support to the UK Government's deficit reduction plan and said that Britain needed to show "readiness" to respond to flatlining growth," writes The Independent on Sunday.The situation of the UK economy has worsened with a pressing need for bank lending to small and medium-sized firms. "So what can be done?" asks David Smith at the Sunday Times. Furthermore, he says, "the political knockabout between chancellor and shadow chancellor does not get us anywhere. Osborne insists he will stick to his deficit-cutting strategy, while Ed Balls calls for a temporary cut in Vat he knows would leave that strategy in tatters." Mr.Smith's recommendation is that the mix in growth between increased spending on public services (including salaries) and capital spending be shifted more in favour of the latter. The reason for that being that the effects on economic activity (the so-called 'fiscal multipliers' for economists, or 'bang for the buck' in layman's terms) from greater capital spending are far larger than those to be obtained from increasing current spending on public services. Thus, between 2009-10 and 2015-16 that type of expenditure is expected to rise to £713.4bn from £600.9bn, while capital spending is expected to get 'butchered'. As well, some of that shift, he believes, could be 'painless', if the savings generated by lower interest payments on the UK's debt (thanks to its current 'safe haven status) be funneled into infrastructure investment.A rise in inflation next Tuesday, when ONS releases its latest inflation data, is unlikely to dampen the chances of a second round of quantitative easing from the Bank of England's Monetary Policy Committee, according to leading economists, such as those at Barclays and Investec, the Sunday Telegraph reports. Thus, annual inflation on the official measure - the Consumer Prices Index - is forecast to rise to 4.5% in August from 4.4% in July. Furthermore, the situation is expected to worsen further in the coming months with inflation nearing 5%. In the opinion of Simon Hayes at Barclays Capital, however, "Engaging in more QE at this time would mean taking more risks with the Bank's credibility; but not doing so would mean accepting a depressed growth outlook and a possible undershoot of the inflation target in the medium term," said Mr Hayes.Chancellor George Osborne is to give his full backing to the Independent Commission on Banking (ICB) report despite the body admitting for the first time that its plans to reform the UK's largest banks will cost the industry many billions of pounds, according to the Sunday Telegraph. (...) The report is also likely to say that legislating for one of the most controversial changes - ring-fencing of retail operations - could be fast-tracked. Other measures, such as increasing capital requirements for the banks, could be delayed so that the Basel III rules are understood and in place, possibly as late as 2019. Political tensions over the direction of the reform were highlighted last night when the former treasurer of the Conservative Party said that the ring-fencing proposals should be dropped, warning that,"If we implement ring-fencing unilaterally - and no other country is proposing to follow - (...) The City would be badly damaged and our global leadership in finance threatened." "Bank bosses fear a key report into the industry published tomorrow will have a severe impact on costs and profits (...)," reports Scotland on Sunday. Positively, perhaps, there is speculation that Lloyds will avoid a Competition Commission inquiry and demands to offload more assets than those already forced upon it by the European Commission. However, some estimates already put the cost to the UK taxpayer from the year-long ICB review at between £15bn to £20bn (if not even higher). Of interest, analysts at Citi hold that this delay to privatisation, "hits RBS ordinary shareholders especially hard, we believe, and ... may well restrict dividends for ordinary shareholders well beyond the lifting of the EC (European Commission) State Aid dividend blocks in the second quarter of 2012." Lastly, the broker highlights that the new measures could put UK banks at a competitive disadvantage, weakening their profitability, their contribution to exports and to the Treasury's tax receipts. Fifteen years ago Vincent Bolloré, a French industrialist, decided to get into the business of electricity storage. Mr Bolloré's technology is about to hit the road. In 2010 his group won a contract to run Autolib, a car-sharing scheme designed by Bertrand Delanöe, the mayor of Paris, which will put 3,000 electric vehicles on the city's streets along with 1,120 stations for parking and recharging. Construction of the stations started in the summer, and Mr Bolloré will begin testing the service on October 1st before opening it to the public in December. Rechargeable batteries are now an important technology for the global car industry as it starts to make ever more electric and hybrid vehicles. Renault, a French manufacturer, is alone investing €4 billion ($5.6 billion) in a range of electric models which it will start selling this autumn. Many producers will unveil new electric vehicles next week when the Frankfurt Motor Show opens, writes The Economist in its latest weekly edition."Bombardier could be thrown a lifeline by the Department for Transport (DfT) with a £120m train order that would preserve hundreds of jobs at the manufacturer's Derby plant. The DfT is giving serious consideration to a proposal that would give the Canadian group breathing space in plans to axe more than 1,400 jobs. If Bombardier receives the green light, it is understood that posts for hundreds of design engineers, currently under threat, would be saved. It is understood that hundreds more jobs would be safeguarded in the production process, although industry sources were unable to specify exact numbers for the whole contract," says The Guardian."The world cannot be running out of oil, because Aidan Heavey keeps finding more of it. Tullow Oil's chief executive has seen the fortunes of his company transformed twice with big discoveries in Uganda (2006) and of Ghana (2007), and investors had been hoping for a third act. The 15% pop in Tullow's share price on Friday after news of a potentially significant find off French Guiana sounds like that act's opening lines. The Zaedyus well is real frontier territory and looks to be a mirror image of Tullow's Jubilee fields in Ghana. Northern South America and west Africa were physically joined aeons ago; Tullow's exploration follows the view that they should be geologically similar. (...) But much more drilling must be done to establish whether Zaedyus and its surrounding fields will yield as much as Jubilee. (...) And takeover-talk routinely surrounds Tullow; the more oil it discovers, the more attractive it becomes to resource-hungry national oil companies. But at these valuations, they may have already missed their chance," writes the Financial Times in this weekend's edition. AB