DTO - The Disconnect Between Oil Prices And E&P Equities

One area of great frustration to oil and gas equity owners is the lagging response of stock prices to crude futures prices. One might think there should be about a one-to-one relationship in price changes.

However, going back to February 2016, when crude prices bottomed following the OPEC induced bid to bankrupt U.S. shale to take market share, crude futures prices have gained 109%, whereas oil equities have gained just 29%. I used the Energy Select Sector SPDR ETF, XLE, as a proxy for energy sector returns.

I have read some analysts conclude that this

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