However, the relationship between oil and inflation isn’t entirely dead. Rather than the CPI, the St. Louis Fed has said that today oil prices have a much stronger relationship with the producer price index (PPI). The PPI is a measurement of the average change over time in the selling prices producers receive for their output. According to Investopedia, between 1970 and 2017, oil prices and the PPI had a positive correlation of 0.71 (compared to a correlation of 0.27 between the CPI and oil prices). “This seems to show that crude oil, as an inflation hedge, is not especially useful,” Path Trading Partners’ Iaccino concluded in his discussion of oil prices and inflation. “But as an input to the idea of potential future inflation, crude oil price has some value.”