Over 40% of Investors More Bearish Due to Oil Market Volatility

In this week’s Sentiment Survey special question, we asked AAII members how oil prices are affecting their outlook. More than two out of five (43%) of respondents say they are feeling more bearish given the recent oil market volatility. Rationale within this group includes a belief that the price of a barrel of oil has a profound impact on the global economy and that negative crude futures indicate a long road to recovery for both the energy sector and overall economy. This group compares to 35% of respondents who state that they are now more bullish in the long term. Many within this group believe that the market has bottomed out and that, in the short term, lower crude prices will benefit the travel and farming industries. Finally, 22% of respondents state that oil prices are not affecting their economic outlook.

Here is a sampling of the responses:

• “Oil price decline is a somewhat bearish signal for me. But the sector has good future value—with companies that have solid balance sheets.”
• “Here in oil-rich Oklahoma, the state economy will ‘tank’ until the price of WTI crude increases. Personally, does not impact my investment decisions. I do not own any exploration and production stocks.”
• “I figure oil prices will remain low for quite a while. Small producers will go out of business. However, after things settle down, it really doesn’t change my outlook for the big picture.”
• “I see oil prices as a positive! Low oil prices help the costs of companies struggling from the pandemic.”

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