International oil prices soar, will energy stocks see a repeat of last year's surge?
The energy sector of the S&P 500 index has risen 2.8% year-to-date, ranking sixth among the best-performing sectors, but far behind the 44% return of the information technology sector.
Since July, international oil prices have shown a volatile upward trend, with significant increases. Currently, the prices of US WTI and UK Brent crude oil are fluctuating around $85 and $89 per barrel, respectively. Compared to the price of around $70 per barrel in early July, the increase is as high as $15 per barrel, exceeding 20%.
Some strategists believe that while energy stocks may not replicate last year's explosive growth, the recent rebound in oil prices may be driving energy stocks to regain their leadership position.
Jonathan Krinsky, Chief Market Technician at BTIG, stated that the impressive trend of oil prices in the face of a strong US dollar suggests that WTI crude oil could rise to $90-$93 per barrel. "Energy stocks are recovering their relative leadership position," he added, providing the following chart:
The S&P 500 Energy sector has risen 2.8% year-to-date, ranking sixth among the best-performing sectors, but far behind the 44% return of the Information Technology sector.
The S&P 500 Energy sector includes giants such as Chevron and Exxon Mobil.
According to Yardeni Research, the Utilities sector has declined by 11.8%, performing the worst. The company provided the following chart to its clients:
