The energy sector continues to be the best-performing sector in 2022 and has managed to remain in the green despite several macroeconomic shocks. As a result of Western sanctions imposed on Russia–the largest natural gas provider in Europe–and surging demand, natural gas prices have increased markedly this year. On May 3, U.S. natural gas prices reached their highest level since 2008,climbing more than 9% to a session high $8.17 per MMBtu, followed by a 30% increase in April.
Over the past few weeks, increased LNG exports and relatively high electricity demand have pushed U.S. natural gas prices higher. Gas prices have soared 4.4% of late and are expected to surge more than 25% this summer. The soaring gas prices have boosted major energy companies' profits and share prices. The bullish sentiment surrounding the energy sector is evident in the Energy Select Sector SPDR ETF’s (XLE) 59.3% gains over the past year.
