One of the best ways to analyze commodities is by watching the equities that benefit from higher prices in that particular commmodity.  For example, Wednesday's monster move by gold mining stocks bodes well for physical gold going forward because mining stocks are a leveraged play on gold with their higher volatility as compared to the metal itself. 

By the same token, energy stocks are a good proxy for the future price of crude.  If equity traders are bidding energy stocks higher, they are banking on higher prices for crude oil as the underlying driver of revenue.  

In the chart below, I have plotted a spread between XLE and SPY (the black line), and the spot price of West Texas Intermediate Crude Oil (the red dashed line).  When the black line is moving higher, XLE is outperforming SPY which means that energy stocks are outpacing the market.  When the black line is falling, that means that energy stocks are lagging the broader market, showing relative weakness.  

Notice from 2007 through  the summer of 2008 how energy stocks outperformed the broader market as crude oil was being bid higher itself - the XLE:SPY spread and crude oil rallied together.   Now at the very top of the chart you can see that XLE peaked vs, the broader market just before crude oil made its final top.  The collapse in energy stocks is what finally allowed the market to come apart in the summer of 2008. 

Next notice how the spread (the black line) made a higher low in December of 2008 while the spot price of WTIC collapsed into its December low.  That showed that institutions were accumulating energy shares which was a signal to expect a rally of some magnitude in crude.  Sure enough, crude kicked off a monster rally last spring that lasted into August. 

Now take a look at the right side of the chart.  You will see that the XLE:SPY spread was range bound for 2009 before it broke down out of its range in July.  Energy stocks have broken down vs, the broader market even as crude pushed out to its 2009 high in August.  The equity players are leaving the energy patch.  Energy stocks are speaking.  I wonder if the crude oil traders are listening.