Oil Outperforming Oil Stocks

Below we highlight the ratio of oil stocks to the price of oil.  This ratio divides the price of oil into the price of the S&P 500 Oil&Gas sector that has been around since 1989.  When the line is falling, oil is outperforming oil stocks (and vice versa for a rising line). 

Since the start of 2007, oil has been outperforming oil stocks in a steady fashion.  The ratio recently hit its lowest level since November 1992, taking out lows made in early '03 and late '04.  At some point, the line will rise again, but only time will tell when that happens.

click to enlarge

Comments

[johnthebear]

surely you have more to say to complete the article. Please continue.

[nyctrax]

no, this is what they do. i find it useful. simple and concise.

[Shaggieman]

Is it USO divided by OIL?

[Doug Roberts]

What symbol is the S&P Oil and Gas sector? I cannot find it. That is the sector you used to calc the ratio of this article.

[Spread Betting Trader]

This is no more than an introduction...where is the analysis? For example, what drives the periods of oil price out-performance/under-... What triggers the turning points? Unless you are providing some sort of answers (or even potential answers) to these sort of questions, then this does nothing for the credibility of the authors.

Besides, the same sort of divergence between the price of a commodity price and the performance of a sector based on the commodity can be seen in gold and a number of other raw materials too. There is no insight from simply highlighting it!