Executive Edge

What oil's six-week win streak means for stocks

Key Points
  • When crude oil prices rise for six consecutive weeks, gains continue for oil and stocks over the next month.
  • Oil just capped a six-week rally, an event that has happened only five times since 2010.
Oil's six week win streak signals higher crude ahead

Oil prices have risen for sixth consecutive weeks, notching an 11% gain for crude during the rally. While a pullback could occur — the oil trade was close to flat on Tuesday as overseas supply threats balanced higher U.S. inventories — recent history suggests there are more gains to come, not just in oil but also in stocks.

Similar six-week oil rallies have happened only five times since 2010, according to a CNBC analysis of Kensho, a big data trading tool used by Wall Street banks and investment firms.

While oil has tended to pull back slightly the week after a six-week period of gains, two weeks later it starts to move higher again, and a full month later oil locks in additional gains.

WTI crude has traded higher more than 80% of the time and tacked on an additional average gain of more than 2.5%.

The also traded higher, although it had more modest gains.

Oil following six-week win streak