Oil and the stock market

1. Oil price

The following chart plots the US dollar price of oil from 1971 to today.

West Texas Intermediate ($) [1971 - Nov 2014]The following chart plots the same data but on a log scale.

West Texas Intermediate ($) [1971 - Nov 2014] log scaleOn this second chart the proportionate fall in the oil price recently can be seen more clearly.

2. Oil price $ v £

The following chart plots the US dollar price of the oil against the price in sterling; both data series have been re-based to start at 100.

West Texas Intermediate ($ v £) [1971 - Nov 2014] - rebased to 100Since 1971 the oil price has risen 1,758% in US dollars, and 2,771% in sterling.

3. The stock market priced in oil barrels

The following chart plots the FTSE All Share Index priced in oil barrels (i.e. FTSE All Share Index divided by the oil price in sterling).

FTSE All Share-West Texas Intermediate (£) [1971 - Nov 2014]The current level of the of the ratio is 85.0, which is pretty close to the average of 88.3 for the period since 1971.


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