Mike Larson | Editor-in-Chief
What will oil stocks do if crude oil REALLY goes vertical? As in toward its all-time high...or even (gulp) $200 a barrel? Surprisingly, one example from the not-too-distant past suggests energy stock investors might be a little disappointed.
Take a look at the MoneyShow Chart of the Day. It shows the incredible run in WTI crude oil futures during the infamous 2007-2008 bull market – and compares it to the move in two leading energy ETFs, the State Street Energy Select Sector SPDR Fund (XLE) in black and the State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP) in blue.
WTI Crude Oil Futures, XLE, and XOP (August 2007 – July 2008, % Change)
Source: TradingView
You can see that WTI went bonkers – up roughly 100% between August 2007 and July 2008. But XOP rose just 46.2%, while XLE gained only 18.7%. Sure, those gains aren’t bad. But they don’t represent a “double,” either.
How does the 2007-2008 experience compare with what we’ve seen (so far) in 2026? Take a look…
WTI Crude Oil Futures, XLE, and XOP (YTD % Change)
Source: TradingView
WTI was up 64% year-to-date as of yesterday afternoon. But once again, XOP was up just 43.9% and XLE was up only 34.9%. That sure beats the 5.2% loss for the SPDR S&P 500 ETF Trust (SPY). But it shows that when oil prices go ballistic, you won’t necessarily capture it ALL as an investor in energy stocks.
And it makes sense when you think about it. If prices really surge in the shorter term, it crushes longer-term demand by kneecapping economic growth.
The economy and markets collapsed in 2008 – and even though that was PREDOMINATELY because of the mortgage and housing market crisis, $150-a-barrel oil didn’t help. That fear of demand destruction down the road is why energy stock investors won’t pay through the nose up front.
In this case, sector investors are also worried about damage to Persian Gulf infrastructure and other facilities owned in part by large energy sector players. Plus, they’re concerned about the increased operational costs that energy companies could be stuck with for months or years. That could include higher security, insurance, transportation, personnel, and other expenses.
Bottom line? Yes, higher oil prices are bullish for oil stocks…to a point. But if oil truly goes vertical, your stocks might get left (partially) behind.
This week Dr. Ed Yardeni of Yardeni Research joins my MoneyShow MoneyMasters Podcast to analyze how the Middle East conflict and “the fog of war” are reshaping the global economic outlook. He discusses why he raised his recession odds to 35% and how current geopolitical volatility may force the Federal Reserve to pause interest rate cuts indefinitely
Beyond the war headlines, Yardeni also breaks down why the AI revolution remains a powerful long-term productivity driver rather than a dot-com bubble repeat. He also provides a unique perspective on the leadership at the Fed and the looming liquidity risks within the private credit market.
Get Expert Portfolio Help by Day, Network Under the Stars by Night
When you make the smart decision to attend our 2026 MoneyShow Masters Symposium Hollywood Florida, you’ll have all this at your fingertips next month...
🎤 Keynotes and workshops like “First Down and Three to Go: Q1 Review and What’s Ahead for 2026” from Paul Hickey of Bespoke Investment Group and “From Uncertainty to Clarity: Navigating Your Portfolio Through the 2026 Election” with Kenny Polcari of SlateStone Wealth.
📈 Access to in-depth MoneyMasters Courses like “Why Smart Traders Break Their Rules: The Simple Position Sizing Strategy That Solves the Discipline Problem” with Deron Wagner of Morpheus Trading Group and “Filtering Chaos: How to Choose the Right Cryptocurrency and Digital Asset Investments” from Merlin Rothfeld of the Trading Academy.
🌃 Memorable and inviting social experiences like our outdoor networking reception with the sound of the Atlantic Ocean in the background...and book-signing sessions where you can get up close and personal with the experts.
Fears that AI could do more economic harm than originally anticipated were a negative influence on markets in the first quarter, especially for select sectors such as software. Indeed, we have not seen any significant rebound in the key fund for the tech sector right now, the iShares Expanded Tech-Software Sector ETF (IGV), observes Tom Essaye, president of the Sevens Report.
👉 TICKER: SPX
Quality investing works in the long term. But what about the psychological aspect of trading and investing? How do you keep your head cool and make sound decisions? Let’s dive in right away, writes Pieter Slegers, editor of Compounding Quality.
What did you think of today's newsletter?
- Great |
- Not Bad |
- Needs Work
