Despite geopolitical turmoil and volatile market conditions, the energy sector posted an impressive performance last year. The Energy Select Sector SPDR Fund (XLE) has gained 43.7% over the past year, compared to the SPDR S&P 500 ETF Trust’s (SPY) 16.1% decline over the same period.
Meanwhile, the reopening of China’s borders after strict COVID-19 restrictions spurred optimism in the energy market and raised oil prices. Moreover, OPEC+ seems intent on keeping the oil market tight to prevent prices from dropping if a recession materializes.
