May crude futures (CLK24) have rallied recently, gaining nearly 5% over the second half of March after the International Energy Agency (IEA) raised its forecast for global crude oil demand, and said markets may face a supply deficit this year if OPEC+ holds the line on production cuts. Additionally, Ukrainian drone attacks on Russian refineries and retaliatory attacks on Ukrainian oil facilities, coupled with ongoing diversions in the Red Sea, could further drive oil prices.
Against this backdrop, the broad based S&P 500 Energy Sector SPDR (XLE) closed the first quarter up 13.5% - outperforming even the artificial intelligence (AI)-powered tech sector, as the S&P 500 Tech Sector SPDR (XLK) gained just 8.4%. For investors looking to add exposure to oil and gas names, let's examine three energy stocks that analysts believe have 20% or more upside potential and offer attractive dividend yields.
