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Famous American industrialist, Jean Paul Getty once said: “Formula for success: rise early, work hard, strike oil.” Though the major oil suppliers followed Getty’s formula seriously, they forgot to consider the demand side. Since the middle of last year, the market is witnessing a free fall in crude prices. In fact, the price of West Texas Intermediate (NYSE: WTI ) fell nearly 60% as compared to mid-2014, when oil was trading above $100 each barrel. Though the price of WTI surged nearly 6% on Friday after jumping 10% a day before, there are still speculations that the momentum is hardly sustainable. The slump in oil prices took a toll on energy shares over the past few months. The biggest energy fund – the Energy Select Sector SPDR ETF (NYSEARCA: XLE ) – lost 8% and 17% in the past one-month and three-month periods, respectively. The slowdown in Chinese economy, an increase in the U.S. rig count, a stronger dollar and oversupply concerns emerged as the key reasons behind the slump. Will It Sustain? The recovery in crude prices at the latter half of last week comes as a surprise, since the fundamentals driving oil price are not so strong. A better-than-expected second-quarter U.S. GDP report, the rebound in Chinese stock markets and the decline in oil inventory emerged as the main reasons behind the surge. However, it is anticipated that these factors had a temporary effect on crude price, and will fail to offset the weak global economic picture and oversupply concerns in the long term. In China, which is the world’s second largest consumer of oil, manufacturing activity for the month of August touched the lowest level in the last six and a half years, basically underlining a frail economy. This also highlights that if China wants to reach its 7% GDP growth target in 2015 – the lowest in years – the country will have to come up with measures to stimulate its economy. In fact, without a step-up, some analysts apprehend that China’s economic activity may fall below 7% in the third quarter. Moreover, news that oil producers increased their rig count for five straight weeks shocked an already oversupplied market. Separately, the nuclear deal between Iran and the U.S. raised concerns about increased oil supply. Moreover, buoyed by higher output from Iraq and Saudi Arabia, the Organization of Petroleum Exporting Countries (OPEC) is currently producing oil higher than their target. Also, foreign oil companies are finding it more profitable to sell crude in an environment of stronger dollar, which in turn, is putting pressure on oil supply. Who are Making the Most? Recently released auto sales data indicates the benefits from the low oil price environment. U.S. auto sales came in ahead of expectations in July, fueled by demand for light trucks and sports-utility vehicles rather than fuel-efficient cars. The seasonally adjusted annual sales rate (SAAR) climbed 3.2%, from June to 17.6 million in July, its second highest tally in a decade. Meanwhile, the airline industry is one of the major gainers from this situation. In the second quarter, the aviation industry is said to have amassed a record quarterly profit of more than $5 billion. The plunge in fuel prices, along with strategic investments to bring in more passengers on board has buoyed profit margins. In this situation, the Auto fund – the First Trust NASDAQ Global Auto Index ETF (NASDAQ: CARZ ) – and airlines fund – the U.S. Global Jets ETF (NYSEARCA: JETS ) – will remain on investors’ radar in the coming days. Separately, along with strong labor market conditions, the decline in oil prices has played an important role in boosting consumer spending. According to the “advance estimate” released by the U.S. Department of Commerce, Real Personal Consumption Expenditure rose 2.9% during the second quarter, higher than the first quarter’s growth rate of 1.8%. Moreover, the Commerce Department reported that retail sales increased 0.6% in July from the previous month, in which sales had remained flat. Core retail sales increased 0.3%, following revised gains of 0.2% in June. In this favorable environment, investors will closely watch the performances of top two retail funds, the SPDR S&P Retail ETF (NYSEARCA: XRT ) and the Market Vectors Retail ETF (NYSEARCA: RTH ), in order to analyze the sector trend in coming days. Bottom Line With less and less possibility of a sustainable oil price recovery in the upcoming months, investors will do well to focus on the sectors discussed above in this volatile environment. Original Post