As oil soars, strange market anomaly points to even more gains

An anomaly is taking shape in the oil market — one that suggests the sheer force behind the recent rally.

Paul Hickey, who runs independent research firm Bespoke Investment Group, says WTI crude is surging in an atmosphere that isn't normally conducive for such big gains.

"We've seen a real big rally in crude oil here off the lows," Hickey said Wednesday on CNBC's "Trading Nation." "The dollar over that same period is up about 5 percent, and as you know, like oil and water, oil and the dollar typically don't mix."

Yet, crude has still managed to rally nearly 15 percent over the past six weeks. Hickey calls it an "impressive trend" in an inhospitable environment. But that doesn't mean it hasn't happened before.

"When we looked back at these prior periods in the market when you see these simultaneous rallies, crude oil has had a little bit better-than-average returns. The energy stocks have done really well going forward as well as the overall stock market," Hickey said.

He highlights the S&P 500 energy index as an area giving Wall Street strong profits.

"It's one of the most extended sectors in the short term, further above its 50-day moving average than any other group. And, it's closer to a 52-week high than any other sector," he said.

But according to Hickey, that doesn't imply oil prices have become too expensive and will stall.

"If you look at the relative strength of the energy sector going back to 1980, it's still very depressed and right near 14-year lows," Hickey said. "Longer term, energy has got a very deep hole to dig itself out of."

Crude oil hit an oil time high of $147.27 a barrel on July 11, 2008. WTI is trading in the low $70s. European Brent crude briefly broke $80 a barrel on Thursday for the first time in 3½ years.

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