Oil vs. Energy Stock Prices: Something's Gotta Give

Jan. 17, 2007 5:19 AM ETOIH, VDE, COP, XOM, PXJ, CVX, USO, IEO, IEZ, XES, XOP1 Comment
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The charts below show the ratio between the price of the S&P 500 Energy stock sector and the price of crude oil per barrel. The ratio is clearly at its highest level in the past three years, meaning that oil stocks have not fallen as fast as the price of the actual commodity during the current decline. So either the stocks are due to play catch up, or the decline of oil is a bit overdone.

click charts to enlarge

oil vs. energy stocks 1

oil vs. energy stocks 2

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Cleve Rueckert graduated from the University of Vermont in 2006 with a BA in Economics and minors in Philosophy and History. He began working at Birinyi Associates in May of 2005 prior to graduating. In addition to managing Ticker Sense, Mr. Rueckert is also a senior equity strategist at Birinyi with a focus on large cap US equities. He also manages the operations and development of Birinyi's subscription based services for individuals and institutions alike. Birinyi research and commentary is regularly featured by the New York Times, Wall Street Journal, Barron's, Bloomberg, Forbes, Fortune, Reuters, and CNBC.
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