Source: Wall Street News

Although AI is the “hot chicken” of the market, the energy sector is quietly becoming the new favorite of capital.

So far this year,$Energy Select Sector SPDR Fund (XLE.US)$The performance was outstanding, with an increase of 13.5%. In contrast,$The Technology Select Sector SPDR® Fund (XLK.US)$With the S&P 500, the increase was only 8.4% and 10.2%.

Despite the strong overall performance of the market, Citibank analysis suggests that excessive popularity in the energy sector may lead to a decline in performance in the short term. Scotiabank Canada, on the other hand, advises investors to seize the opportunity to buy at a low level once the energy sector falls.

Morgan Stanley remains pessimistic about the overall US stock market, but it is particularly optimistic about energy stocks and raised the rating of energy stocks from neutral to increased holdings. It believes that compared with crude oil prices, there is room for improvement in energy companies' performance.

Morgan Stanley believes that the recent signals released by the Federal Reserve indicate that its concerns about inflation are weakening and will continue to maintain a relaxed financial environment. In this environment, commodities and energy will have an opportunity to usher in a wave of growth.

The gap between supply and demand will drive up oil prices

Standard Chartered analysts expect oil prices to rise in the next few months. They forecast that global oil demand will reach a new historical high, reaching a new high of 103.1 million barrels per day in May, then reaching 103.62 million barrels and 104.31 million barrels in June and August, respectively, to a new high.

Meanwhile, as Russia deliberately limits production to support high prices, crude oil supply growth may be limited.

The bank expects the average price of Brent crude oil to be $94 per barrel in the second quarter of 2024, driven by the gap between supply and demand.

editor/tolk