Last week we noted the huge spike that natural gas prices have seen recently on freezing temperatures around the country. At the same time, oil prices haven't done much at all, which has pushed the ratio between the price of oil and natural gas lower. Below is a chart of this ratio going back to 1990. When the line is rising, oil is outperforming natural gas, and vice versa, for a falling line.
From 1990 to 2009, the spread between oil and natural gas traded in a relatively tight range between 5 and 15. From 2009 to early 2012, however, the ratio spiked to sky-high levels as oil did well and natural gas plummeted. In April 2012, the ratio hit its record high level of 53, and it has been declining ever since. The long-term average spread between the two energy commodities is 12.33, so even at 19.07, natural gas needs to continue to outperform to get back to the historical average.