Energy is the top performing sector this year by a wide margin. The SPDR Energy ETF (XLE) has advanced 13 percent so far in 2021, compared with a 0.3 percent gain for the S&P 500.
Hopes about the economy reopening and a rebound in China are obviously parts of the story. But the supply/demand fundamentals may be improving as well.
Last week, the Energy Department reported a 3.2 million barrel drop in crude-oil inventories. That was bigger than then 2.3 million drop anticipated by forecasters. It was the third straight week that the number showed less of a glut than feared — the longest week of bullish surprises since September 2019.
