Oil shocks and oil stocks: evidence from the 1970s

The present paper examines the returns to 29 oil companies listed on the New York Stock Exchange during the period surrounding the oil shock of 1973. The returns are decomposed into production, refining, foreign and domestic operations. The hypothesis that domestic price controls benefitted refiners is tested. Finally, the hypothesis that oil price risk was priced in the sense of the arbitrage pricing theory is tested.