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.

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