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.
RE:I could be mistaken but this is purely my view.....
by ASHOK on Feb 02, 2008 05:50 PM Permalink
US is going in for SOLAR / WIND / ETHANOL in a big way. It will eventually help reduce Crude oil as well as coal consumption.
But than China & India are going up on Energy Consumption.
RE:I could be mistaken but this is purely my view.....
by Infidel Blogger on Feb 07, 2008 01:27 AM Permalink
Brazil and Europe is doing the right way with ethanol and solar. The flip side of it is - high commodity and food prices as excess of land are being used for corn production. What goes around comes around.. Plus massive corn based ethanol aint' cheap. Its different with sugarcane based, but US is not yet up with sugar based etahnol production in mass scale. The big oil mafia and auto lobbies won't let it happen. Well, i traded my 93 octane gas guzzler with a 05 VW diesel/grease hybrid and get paid from local restaurants for their unwanted rapseed oil/grease. Way to go !
