Oil is the latest casualty in a wider commodity downturn. Energy, metals and some agricultural markets have been falling consistently throughout 2015.

This week, miners Anglo American and Rio Tinto announced major strategy changes in response to falling revenues.

Who gains from cheap oil?

Falling oil prices mean cheap commodities, petrol and lower energy costs for consumers. According to Hargreaves Lansdown figures, the world consumes about 93 million barrels of oil every day and the price of those barrels has fallen roughly $70 since last autumn, leaving about an extra $6bn in the pockets of oil consumers around the world, each day.

Here, Adam Laird, investment manager at Hargreaves Lansdown, reveals how investors can play falling and recovering oil prices:

Three cheap oil beneficiaries

UK households

SPDR MSCI Europe Consumer Discretionary UCITS ETF (CDIS)

Asda’s monthly Income Tracker, covering family spending power, has shown double digit growth boosted by the lower cost of energy. We are already seeing car sales rise, a beneficiary of higher discretionary spending (source: ONS) and in particular this ETF covers car makers like Daimler and BMW, whose sales may also benefit from cheap petrol.

Transport firms

Easyjet, Ryanair

Oil price hedges are falling away and lower oil prices are starting to flow through to the bottom line of these companies. EasyJet recently announced that it expects around £150m of benefits from lower fuel prices in the current financial year. Ryanair has missed out on a lot of the benefits from cheaper fuel so far due to its hedging policy. However it expects €430m of savings from lower fuel prices in financial year 2017 as these hedges fall away.

Utilities firms

db X-Trackers Stoxx Europe 600 Utilities (XS6R)

Utilities firms are big consumers of oil, gas and other energy products. This ETF invests in 26 of Europe’s largest utilities firms like E.ON, Centrica and SSE, who may benefit from low energy prices.

Three picks for a recovery in the oil price

Low oil prices are already impacting supply. Over 40% of the world’s oil rigs have been taken offline in the last year and mining companies are scaling back operations. The short term will be tough, but this current weakness might just start to bring about a change.

The short term prospects for oil and commodity ETFs remain dour. Oil majors were valuable shares for income seeking investors, who have taken a bath as prices have fallen. Many more producers could yet restructure or cut dividends.

However, the darkest hour is before the dawn and for longer term investors, this could be a cheap entry point. Valuations are low and might appeal to an investor with a strong stomach and a longer time horizon. Particularly for the regular saving investor who will pick up cheap shares in any future prices fall – if they hold their nerve.

FTSE 100 shares: Legal & General UK 100 Index (Class C)

Mining and energy are important sectors for the FTSE 100. They account for roughly one fifth of the index, much higher than the global average, and are poised to benefit if the index rebounds. However the FTSE 100 is much wider than just these markets, spreading the risk if current conditions persist.

iShares Oil & Gas Exploration & Production UCITS ETF (SPOG)

The oil and gas industry has been withholding investment and shelving projects in response to low prices. This ETF has fallen almost a quarter over last year, but invests in almost 100 oil exploration companies globally. A risky choice, but could benefit if oil once again rises.

Lyxor ETF MSCI World Materials (MATG)

Lyxor’s Materials ETF covers around 130 global companies in mining and chemical production, whose profits could rise if we see  a wider commodity recovery.

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