Market Pulse: Energy Hasn’t Done This Since the Pandemic

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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.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.