There is no shortage of eye-popping superlatives around oil’s huge spike on Tuesday:
- Biggest single-day percentage jump since April 2, 2009 (+8.55 percent).
- Biggest dollar-jump since September 22, 2008 (+$7.37).
- Highest settle since October 3, 2008 ($93.57).
Yet even after the intensity of Tuesday’s move, NYMEX crude still ranks among the worst ways to play energy so far in 2011. Including the spike, crude is up a mere 2.4 percent year to date, after spending most of the last seven weeks in negative territory.
Compare that to oil stocks—which as a group have climbed 11 percent to become the best performing sector in the S&P 500.
The Dow’s best performer this year? You guessed it: oil giant Exxon Mobil, up 17 percent.
So how did “oil the commodity” and “oil stocks” become so detached? One possible answer: lots of dealmaking.
“You see big international companies deciding where to put their chips down—and they’re saying U.S. natural resources aren’t a bad place to be,” said Ken Hersh of NGP Energy, a private equity firm with $10 Billion under management, on Tuesday’s Strategy Session.