Oil prices have whipsawed over the last couple of years, but more recently crude futures (CLX23) have rallied to a series of new year-to-date highs. The performance of energy stocks is closely interwoven with oil and gas prices, as higher commodity prices boost their earnings – and by extension, their stock prices.
The recent price action of energy stocks has diverged from the broader equity markets. In 2022, the energy sector of the S&P 500 Index ($SPX) gained 58%, and was the only sector to end in the green, as wider markets tanked and tech stocks had their worst year in decades. The energy sector, meanwhile, had its best-ever year in 2022 as Russia’s invasion of Ukraine helped catapult oil prices to multi-year highs.
