My take is that the US will run into a noticeable recession and the economy will face some hardships especially from second half of 2008. This would be characterised by - - employment slowdown - reduced corporate earnings - reduced consumption/spending.
Most of all I feel there could be a noticeable decline in fuel consumption. America consumes 40% of the world's oil production. Reduction here will mean huge reduction of offtake of petroleum which means oil prices should go below US $ 80 from the present US$91.
A 10% reduction ( or even more ) should result in a massive increase in revenue and profits for oil marketing companies - especially IndianOil and Bharat Petroleum. Indirectly ONGC would also benefit.
This probably should result in a massive surge in earnings of IOC and BPCL leading to a corresponding surge in their stock prices. Investing in these stocks can be considered a calculated risk - but a well calculated one.
