When opinions are as starkly contrasted towards binary outcomes, we must assume this is dangerously close to speculation.

If wisdom is asking better questions than delivering answers, I would say that investors are, at this point, better served to challenge assumptions about how the trajectory of the oil price might impact their portfolio. From there, they can decide what exposure they might seek– or if they would prefer to hedge out some of the risk.

There is also the assumption that once the price reaches the “bottom” – that so often ineffable mirage – oil will spike back up again like it did in 2008/09. However, I am not so sure about this unless we have further escalation of tensions among the Middle Eastern producers with not a little help from the US. Although, surely Obama must be under severe pressure from the frackers in North Dakota and Texas to “do something” as the majority of US job growth has been as a direct result of the shale “revolution”. But the point is, we can’t take a sharp rebound as a short-term certainty, else we are merely speculators.

It is worth also assessing outcomes. If we get the scenario, where oil does dip lower, amongst the winners should be smaller companies as they rarely have the advantage of hedging their energy costs. One area, particularly interesting in the event of a falling price, is smaller gold mining stocks where energy is a major cost of extraction. Add in to the mix an oil price that is a long way off its 2011 peak, and we start to see a compelling investment case. One Elite rated fund where investors could get access to this theme is Blackrock Gold & General.

The potential is that it could fall even lower in the short term. However, I’m a lot more optimistic about it longer term. Here I would look for exposure to the Guinness Global Energy fund.

The potential tailwind of a cheap oil price has been compared to a boost of QE stimulus. It is also a game-changer in terms of consumer spending power across the globe. This is because most consumers are affected by oil price fluctuations. Thus, a plummeting oil price is the equivalent of giving consumers a tax break. Hence, we think funds with exposure to the consumer may benefit – one such fund is Elite rated Artemis UK Special Situations.

Airline stocks have already priced in a lot of the action in recent months with the likes of Delta and Ryanair performing very strongly and one might assume this is a good way to play the oil price. However, these airlines typically hedge their AVGAS purchases so they may not immediately be net beneficiaries.

Another point is that with large parts of the global economy experiencing deflation, there is no guarantee that people will actually spend what they are saving in fuel costs. As for trying to play any rebound via ETCs (exchange traded commodities), for example, we must remember that this is not as straightforward as we might think, particularly as the oil price is not priced off spot.