Over the past year, oil import costs for countries in the Organization for Economic Co-operation (OECD) have slicked upwards by a margin of 30%, hitting a whopping $790 billion -- that's the equivalent loss of 0.5% of their GDPs. Earlier this week, U.S. light oil prices hit a 27-month high, with crude also trading far above average. And some experts think this puts 2011's recovery in serious jeopardy. Because oil has a way of leaking into just about every nook and cranny of the world's economy.

According to the UN's Food and Agriculture Organization, sky-high oil spurred food prices to new records in December. Coupled with the rising price of coal, on the move since flooding in Australia put a halt to most of their production of the resource, oil's ascent heightens anxiety over the cost of commodities at this moment in the recovery. Experts wonder, as the demand for raw materials increase, will supply be able to keep pace?

Fatih Birol of the International Energy Agency (IEA) is among those concerned that the current price of oil will endanger the global economy at large. He opines that, "if the oil price goes much higher, it affects everything from the trade balance to household spending" -- which could result in deflated personal budgets and higher inflation.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) remains unmoved and hasn't given any indication of plans to increase export quotas. But Birol warns that greed may not turn out to be so good for oil exporters in this case.

He explains that, "[they] need clients with healthy economies, but these high prices will sooner or later make the economies sick." The end result? "The need for importing will be less."

So while oil prices have been climbing, it's worth remembering that what goes up, must eventually come down ... so which oil stocks should you be avoiding if oil prices pull back?

It might be interesting to start with the oil stocks that are expected to see continued gains. As history tells us, when too many people get optimistic about a stock, it's probably time to get out. Excessive bullishness around a stock is often a fairly good indicator that the bottom's about to drop out -- and an investing rule of thumb for contrarians like Warren Buffett.

Here's a list of oil-related stocks that are seeing extreme optimism in the options market, with a large number of open call option contracts relative to put option contracts, as well as an uptick in institutional buying over the last three months.

Is this extreme optimism justified? What do you think? (Click here to access free, interactive tools to analyze these ideas.)

Company

Options Sentiment

Institutional Buying

SandRidge Energy (NYSE: SD)

Call open interest at 152,052 contracts vs. put open interest at 57,813 contracts (Put/Call ratio at 0.38)

Institutional investors currently own 290,808,605 shares vs. 247,017,613 shares held three months ago (+17.73% change)

Concho Resources (NYSE: CXO)

Call open interest at 16,942 contracts vs. put open interest at 4,681 contracts (Put/Call ratio at 0.28)

Institutional investors currently own 1,769,486 shares vs. 1,574,058 shares held three months ago (+12.42% change)

Key Energy Services (NYSE: KEG)

Call open interest at 4,510 contracts vs. put open interest at 1,585 contracts (Put/Call ratio at 0.35)

Institutional investors currently own 136,037,711 shares vs. 124,004,407 shares held three months ago (+9.7% change)

Holly Corporation (NYSE: HOC)

Call open interest at 3,437 contracts vs. put open interest at 2,319 contracts (Put/Call ratio at 0.67)

Institutional investors currently own 54,066,102 shares vs. 51,078,439 shares held three months ago (+5.85% change)

Hyperdynamics Corporation (NYSE: HDY)

Call open interest at 4,931 contracts vs. put open interest at 1,165 contracts (Put/Call ratio at 0.24)

Institutional investors currently own 2,210,757 shares vs. 2,096,630 shares held three months ago (+5.44% change)

Exterran Holdings (NYSE: EXH)

Call open interest at 2,114 contracts vs. put open interest at 717 contracts (Put/Call ratio at 0.34)

Institutional investors currently own 4,693,338 shares vs. 4,575,119 shares held three months ago (+2.58% change)

Oasis Petroleum (NYSE: OAS)

Call open interest at 953 contracts vs. put open interest at 408 contracts (Put/Call ratio at 0.43)

Institutional investors currently own 50,218,570 shares vs. 49,096,173 shares held three months ago (+2.29% change)

Options data sourced from Schaeffer's, institutional data sourced from Reuters. The list has been sorted by change in institutional ownership. (Note: Data was sourced on January 13, 2011.)

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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