Should oil prices and renewables decouple?

We didn’t especially think so, either. But some would disagree:

“On a factual basis, there shouldn’t be any correlation,” says Brian Yerger, the chief executive of Aerca Advisors, an investment consulting firm. “There’s no rational reason for it.”

Analysts say it’s a sign of oversimplification by investors, who lump renewables together and expect them to rise as old energy, or fossil fuels, decline. “It’s a guttural connection people make, based more on feeling than on facts,” said Ron Pernick, a principal at the research firm Clean Edge.

It’s not clear from this story why they believe this, other than the very reasonable point that oil is primarily a transport fuel and therefore solar and wind technology companies are unlikely to directly displace it. The popular crude benchmarks are just that – benchmarks. Traders and investors like to have a liquid reference point. As numerous commentators have pointed out, the most crude benchmarks don’t even necessarily reflect what is going on in the oil market: consider speculation arguments, demand-vs-supply and WTI grumbles, just to name a few.

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