oil prices have gotten crushed in november but you wouldn’t know it by looking at oil stocks which have barely budged don’t expect them to defy gravity for much longer the price of oil has had a tough go of it in recent months wti crude oil futures have fallen 11 in november amid concerns about slowing growth in the us a byproduct of the federal reserve’s rate hikes and worries that china won’t abandon its zerocovid policy and let its economy fully reopen nor is the weakness a onemonth trend since peaking at 12370 on march 8 oil has dropped 38 to 7724 and is only up 28 in 2022 despite russia’s war in ukraine and opec’s refusal to increase production   5 stocks that rose the last time oil stayed below 80   something has to give for exxon mobil   europe’s price cap on russian oil is all bark no bite oil stocks however have been living in a different world despite the drop in the price of oil in november the energy select sector spdr etf xle has dipped just 01 this month and it’s gained 19 since oil peaked in march eog resources eog up 05 kinder morgan kmi up 19 and williams wmb up 23 are just a few of the oil companies to rise in november don’t expect that strength to last when these divergences have occurred weakness usually followed at least in the short term with oil stocks dropping an average of 22 over the next week and 23 over the following two weeks according to sundial capital research data “when the energy sector ignores the deterioration in crude oil prices energy stocks tend to weaken in the near term” writes sundial’s dean christians the good news is that the drop tended to be a buying opportunity as energy stocks went on to gain an average of 121 over the following 12 months for longterm investors that suggests preparing for a rockier ride but holding on—if they believe that something has fundamentally changed regarding oil and oil stocks given the return of inflation the war in ukraine the shift away from fossil fuels and other factors but make no mistake—it will be a bumpy ride “while we continue to believe that the longterm commodity curve is undervalued and that normalized brent should be closer to 90b vs december 2024 at 75b the near term path has gotten more uncertain with front month having rapidly descended to 8085b” writes goldman sachs’ neil mehta “we do believe that oil markets will need to stabilize in order for the equities to continue to perform”