The biggest equity impacts so far has been twofold: it has put a damper on sales at retailers of the most price sensitive consumers -- Tthat means the bigger discounters (Wal-Mart,Target, Kmart, Kohls, etc.).Unremarked on is the fact that increasing oil prices also spurs new exploration for oil and allows for development of fields and locations that are economically not viable at lower prices, as I have said before, you can do many things with oil at $80/barrel oil that cannot be cost justified at $12/barrel.
Second, sales of the largest and most profitible SUVs are slowing. This has a disproportionate impact on GM and Ford. I'm not sure what the net net is on an individual (consumer) level; if you own a large SUV, I expect you will be disappointed at what you can sell it for, as long as gas stays near $2.50 per/gallon. Now consider all of the SUVs which have been leased over the past 3 years: Dealers will soon have a glut of them on their lots, if they don't already, as lease renewal/extensions and trade ups slow.
After years of marketshare gains by Trucks/SUVs over Cars, sales may well shift back from the large inefficient Trucks towards smaller relatively more efficient Autos. (Where are CAFE standard improvements when you need them?) This presumes gas merely stays near $2.50; If it creeps towards $3, this will accellerate. And that plays into the product lines of Toyota, Honda, Nissan, Mazda, as well as VW and Hyundai.
The issue of insufficient refining capacity is also not addressed (see my earlier post on this here). Some amount of what consumers pay is tied to the inability of the "system" to process existing crude stocks rapidly enough. And, given the seeming impossibility of buidling new US refineries, this part of the equation will not go away any time soon.
Update: More on refinery shortage and price increases here
A lack of oil refining capacity that has helped to push up crude oil prices to record peaks above 58 dollars a barrel is a problem affecting the world -- not just the United States, analysts say.
Such supply difficulties troubled the international community, with US Federal Reserve Chairman Alan Greenspan warning this week that the state of global refining capacity was worrying.
And the resulting higher energy costs will shave between 0.25 and 0.5 percentage points at least off global economic growth this year, International Monetary Fund chief Rodrigo Rato stated Wednesday.
"The problem of a lack of refining capacity affects the whole world," Societe General analyst Frederic Lasserre said.
"The United States... has been short of refining capacity for a very long time. Each year, they import refined products, in particular European gasoline during the second quarter."
How about another chart:
(source here)
Update (8/12/05): Update here.
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