Energy stocks follow oil prices, but loosely. The Energy Select Sector ETF (XLE) is a fund that holds US energy company shares and trades on an exchange. We compared it with West Texas Intermediate (WTI), a main US oil price benchmark. From May 2006 to October 2026, they moved in the same direction in 187 of 246 months.
Their monthly changes have a correlation of 0.60. Correlation is a score from -1 to 1 for how closely two series move together. A score of 1 means perfect lockstep, while 0 means no link. At 0.60, the link is clear but far from tight. We wrote this on 11 November 2026, using month-end prices (the last trading day of each month) to 30 October 2026.
Do energy stocks follow oil prices? Yes, loosely. XLE, a fund of energy company shares, and WTI, a US oil price benchmark, moved in the same direction in 187 of 246 months from May 2006 to October 2026. Their monthly changes have a correlation of 0.60.
On average, a 1% monthly move in WTI came with a 0.39% move in XLE.
Of the calendar years from 2007 to October 2026, the two split furthest apart in 2009, when WTI rose 78.0% and XLE rose 19.3%. In 2022, XLE rose 57.6% and WTI rose 6.4%.
Correlation is a score from -1 to 1 of how closely two series move together. It does not show that one drives the other.
What are XLE and WTI?
XLE is State Street's Energy Select Sector ETF. An ETF, or exchange-traded fund, is a fund whose shares trade on an exchange like a stock. We explain the structure in What Is an ETF?.
State Street's own page says XLE seeks to correspond generally to the performance of the Energy Select Sector Index. That index represents the energy sector of the S&P 500 (an index of 500 large US companies). We read that page on 11 November 2026.
On 10 November 2026, XLE held 92.17% in oil, gas, and consumable fuels companies and 7.83% in energy equipment and services companies. Its two largest holdings were Exxon Mobil at 24.06% and Chevron at 18.50%.
WTI is West Texas Intermediate, a crude oil produced in Texas and southern Oklahoma.
The U.S. Energy Information Administration (EIA) describes it as a reference price for other crudes, traded in the spot market at Cushing, Oklahoma. A spot price is the price of a one-time purchase for immediate delivery. Our oil market explainer covers how that market works.
How we compared them
Both series are prices.
XLE's price is its closing price, adjusted for the two-for-one share split in December 2025 (each share became two, halving the price) that appears in its price file. WTI is the EIA's daily spot price. The series we downloaded on 11 November 2026 runs to 3 November 2026.
We took the last trading day of each month, from April 2006 to October 2026. That gives 247 month-ends and 246 monthly changes. A monthly change is one month-end price divided by the previous one, minus 1.
We leave dividends (cash payments to shareholders) out of the main comparison, because a spot price pays none. Counting XLE's dividends gives a correlation of 0.60 as well.
How closely do energy stocks follow oil?
Chart 1 sets both series to 100 at the end of April 2006, so each line shows how that starting value grew or shrank. We call that scale the index.
Source: YX Insights price data; U.S. Energy Information Administration (WTI spot price)
By the end of October 2026, XLE's price stood at 245.1 and WTI at 149.8. XLE's price rose 145.1% over the window and WTI rose 49.8%. XLE with dividends counted rose 347.5%.
On the index, WTI peaked at 194.9 in June 2008 and sank to 26.8 in April 2020. XLE's lowest month-end was 50.3, in October 2020.
In the 246 monthly changes, both rose in 104 months and both fell in 83. In 33 months, XLE rose and WTI fell. In 26 months, XLE fell and WTI rose.
On average, a 1% move in WTI came with a 0.39% move in XLE over the window. In the worst month for each series, March 2020, WTI fell 54.2% and XLE fell 35.8%. In October 2008, the second-worst month for both, WTI fell 32.4% and XLE fell 19.3%.
Is the link steady?
No. We measured the correlation again over every 36-month stretch, ending each month from April 2009 to October 2026. That gives 211 stretches.
Source: YX Insights price data; U.S. Energy Information Administration (WTI spot price)
The 36-month correlation ran from 0.30 in the stretch ending March 2023 to 0.88 in the stretch ending March 2020. The latest stretch, ending October 2026, stood at 0.55. In 8 of the 211 stretches, it fell below 0.50.
The monthly correlation was 0.70 from May 2006 to December 2013 and 0.69 from 2014 to 2019. It was 0.52 from January 2020 to October 2026. The three periods cover 92, 72, and 82 monthly changes.
Our correlation explainer covers the measure in more depth.
When did energy stocks and oil split apart?
Chart 3 compares XLE's price change with WTI's change over four windows. The first is 2009, the year from 2007 to October 2026 (2026 counted to October) with the largest gap between the two. The other three are oil episodes we chose: 2014 to 2016, 2020, and 2022.
Source: YX Insights price data; U.S. Energy Information Administration (WTI spot price)
In 2009, from December 2008 to December 2009, WTI rose 78.0% from $44.60 to $79.39, while XLE rose 19.3%, a smaller gain.
The 2014 to 2016 window runs from the WTI month-end high of 2014, in June 2014, to its low of 2015 and 2016, in February 2016. WTI fell 69.1% from $106.07 to $32.74. XLE's price fell 43.5%, a smaller fall.
In 2020, from December 2019 to December 2020, XLE fell 36.9% and WTI fell 20.9%. XLE fell by more than oil.
In April 2020 alone, WTI's month-end price fell 6.2% while XLE rose 30.8%. The EIA series shows WTI at minus $36.98 on 20 April 2020 and $8.91 the next day, a swing that month-end prices hide. We cover it in negative oil prices.
In 2022, from December 2021 to December 2022, XLE's price rose 57.6% while WTI rose 6.4%. With dividends counted, XLE rose 64.2%.
The gap runs both ways. In 3 of the 20 years from 2007 to October 2026 (2026 counted to October), the two moved in opposite directions.
XLE rose and WTI fell in 2012 and 2025. The reverse happened in 2017. In the other 17 years, both moved the same way.
In 2026, to October, XLE rose 56.6% and WTI rose 87.8%, so oil gained more than the shares.
What the figures do not show
We did not test why the two split in any window.
The monthly figures use the last trading day of each month, so a move inside a month does not appear.
The first month-end is April 2006, so the first monthly change is May 2006. The comparison covers one fund and one grade of crude. We chose three of the four windows. The 2009 gap is larger than any of those three.
Correlation shows how closely two series moved together. It does not show that one drove the other.
So do energy stocks follow oil prices?
They follow it more often than not, but with a wide margin.
XLE moved the same way as WTI in 76.0% of months. The two split furthest in 2009 and 2022, of the calendar years we checked. Our oil and gas industry guide and stock market sectors guide cover the businesses behind the fund.
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Common questions about energy stocks and oil prices
Do energy stocks and oil prices move together?
Yes, loosely. From May 2006 to October 2026, XLE and WTI moved in the same direction in 187 of 246 months, or 76.0%. Their monthly changes have a correlation of 0.60. On average, a 1% WTI move came with a 0.39% XLE move.
Can energy stocks rise when oil prices fall?
Yes. XLE rose in 33 of the 116 months in which WTI fell. In calendar years, XLE rose while WTI fell in 2012 and 2025. In 2022, WTI rose 6.4% while XLE's price rose 57.6%, so a small oil gain came with a large share gain.
What is the correlation between XLE and oil?
The correlation of monthly changes between XLE and WTI is 0.60 from May 2006 to October 2026. Over rolling 36-month stretches, it ran from 0.30 to 0.88. It stood at 0.55 for the stretch ending October 2026. A score of 1 would be perfect lockstep.
Is XLE the same as the price of oil?
No. XLE seeks to correspond generally to the Energy Select Sector Index, which represents energy companies in the S&P 500. On 10 November 2026, it held 92.17% in oil, gas, and consumable fuels companies. Exxon Mobil and Chevron made up 24.06% and 18.50%. The oil price is not part of the index.
DISCLAIMER: This article is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice, nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
