FedEx Corporation (FDX), Delta Air Lines, Inc. (DAL): Stocks to Own for an Oil Price Collapse

Why oil prices could collapse

Business Insider notes that Deutsche Bank has its eye on a number of factors that could send the price of oil lower:

1. More oil coming from the U.S. New drilling methods have increased oil production in the U.S. significantly in recent years.
2. An economic slowdown in China or the U.S. could reduce the demand for oil
3. A resolution of crisis in the Middle East, including a more favorable Iranian regime, should alleviate supply concerns.

The first and third factors should benefit companies like Delta, FedEx and J.B. Hunt. Oil companies might not like it, but transporters should see their business strengthen as oil prices fall.

However, if oil prices drop on falling demand — an economic crash in China or the U.S. — investors won’t find safety in the aforementioned stocks. FedEx and J.B. Hunt won’t have much to ship even if the cost of their shipping is low, and Delta won’t be able to service many tourists and business travelers when the economy is struggling.

Investing for an oil decline

If Deutsche Bank is right, and oil prices are about to take a dive, investors should consider adding some transport stocks like FedEx, J.B. Hunt, and Delta Air Lines to their portfolio.

Of course, if oil is dropping because the economy is collapsing, these stocks won’t offer much safety. However, if oil’s decline is due to other factors (a reduction of conflict in the Middle East, more U.S.-based supply), these companies — and their investors — should benefit.

The article Stocks to Own for an Oil Price Collapse originally appeared on Fool.com and is written by Sam Mattera.

Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends FedEx. Sam is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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