By Todd Shriber
New York, February 21( – It's a common question in era of high oil prices: How do drivers extract some modicum of revenge for all the financial pain incurred at the pump? One would think the logical answer is with oil stocks and that would mean the likes of Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX), Royal Dutch Shell (NYSE: RDS.A) and BP (NYSE: BP). After all, that quartet has their names splashed across thousands of U.S. gas stations.

It's almost too simple: See gas prices that are high by your own personal standards, buy an integrated oil stock and have the last laugh. Not so fast. Just look at a side-by-side comparison of the United States Gasoline Fund (NYSE: UGA) and the Energy Select Sector SPDR (NYSE: XLE) over the past five years. UGA tracks NYMEX-traded unleaded gasoline futures. XLE tracks a basket of many of the largest U.S. oil names with Exxon and Chevron combining for almost a third of the fund's weight.

Over the past five years, UGA has outperformed XLE by a fair margin, though it should be noted there have been plenty of times in those five years where the two funds have shared a fairly intimate correlation. Arguably, we could end the discussion now and just say high gas prices aren't quite the catalyst for oil stocks one would think. But that begs the question: Why?

Well, it's a straightforward economic scenario: High gas prices mean consumers, a group that represents nearly 70% of U.S. GDP, have less discretionary income. Less discretionary income hits a broad swath of sectors that are home to myriad companies that are loyal oil purchasers. In other words, the impact of high gas prices actually is bad for oil stocks because while these companies may be reporting stellar profits, other sectors may be seeing their stocks falter and like or not the baby (oil stocks) is going to be thrown out with the bathwater (most other sectors.)

You've probably heard it before: High gas prices act as a tax and a regressive one at that. One factoid frequently mentioned is that for each penny gas prices increase, $1 billion is sapped from the U.S. economy. That means if gas goes from $4 a gallon to $5 gallon, $100 billion in spending basically disappears. And remember this: Gas price are historically high in the summer time because that's when folks are taking vacations, but the stock market is historically weak during the summer months.

Of course, it must be noted that high oil prices adversely impact refining margins; so integrated companies like Exxon and Shell are slow to respond, if they respond at all, to rising oil prices. Meaning the better way to play the higher oil/gas theme is with an independent name like Anadarko Petroleum (NYSE: APC) or Apache (NYSE: APA).

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