Here’s how investors are underestimating the war on plastic straws and bags

There’s nothing like splashing in the waves with family, friends and the plastic garbage that’s floating in the water.

People want to eliminate that last bit from their beach day, and that helps explain the growing movement to cut down on the use of plastic stuff, including straws and bags.

Investors could be underestimating what this war on plastic means, according to Nick Stansbury, a fund manager at U.K.-based Legal & General Investment Management. The backlash is bearish for oil companies XLE, -0.44% and crude prices CLU8, +0.66%  , he suggested in a statement last week.

“Investors need to recognize the risk that long-term oil demand growth cannot be relied upon, as plastic and therefore, oil consumption, is dramatically reduced,” said the LGIM strategist, referring to the fact that plastic items are made from oil.

“Peak demand is coming sooner than many believe. The destabilizing effect on oil markets will be profound, and we believe that investors, and oil companies, need to start taking those risks more seriously.”

Stansbury’s view served as a call of the day for our Need to Known column.