Energy Sector Surges to Record High Amid Rising Oil Prices

The S&P 500 Index saw a decline of 0.8% last week, but the energy sector bucked this trend, rising by 2%. This surge in energy stocks has pushed the sector to the top of the year-to-date leaderboard, with a gain of 44.5%, notes Ed Yardeni, editor of Yardeni QuickTakes.

The sector's performance can be attributed to higher oil prices, with Brent crude rising to $104.61 on Friday after strikes and Houthi attacks impacted Saudi oil facilities. The S&P 500 Energy index has reached a record high, driven by the oil and gas refining and marketing industry, which is up 127.5% so far this year.

Despite its strong performance, the sector remains under-owned, accounting for only 3.5% of the S&P 500 market capitalization and 4.7% of the index's forward earnings share. Earnings have been a key driver of the energy sector's rally, with forward earnings up 57% year-to-date.