Energy Stocks Soar as Hedge Funds Bet Big, but Is the Trade Too Crowded?

The energy sector has seen unprecedented demand from hedge funds in recent weeks, according to The Kobeissi Letter. Hedge funds have turned most overweight on energy stocks relative to global stocks since June 2024.

The United States Oil Fund (USO) has soared nearly 88% so far in 2026, while the ProShares Ultra Bloomberg Crude Oil (UCO) has gained more than 120%. The United States Brent Oil Fund LP (BNO) is up over 82% in the same time.

Venezuela is considering leaving the Organization of the Petroleum Exporting Countries (OPEC), which could allow it to pursue higher production without future restrictions. Chevron has expanded its operations in Venezuela, and Washington is discussing a potentially major stake in Venezuelan oil fields.