--- title: "The strongest historical record of outperforming the market! From AI to HALO, U.S. energy stocks continue to have momentum after a surge" type: "News" locale: "en" url: "https://longbridge.com/en/news/281198732.md" description: "U.S. energy stocks are expected to outperform the market by the largest margin in history against the backdrop of the Middle East war and the tech stock sell-off. The S&P 500 Energy Index rose 39% in the first quarter of this year, while the S&P 500 Index fell 7%. This sector has risen for 14 consecutive weeks, setting a new record. Companies like Exxon Mobil and ConocoPhillips have seen increases of over 40%. Investor interest in the energy sector has risen, with funds flowing into high-risk industries, including energy, driving up stock prices" datetime: "2026-03-31T13:42:10.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281198732.md) - [en](https://longbridge.com/en/news/281198732.md) - [zh-HK](https://longbridge.com/zh-HK/news/281198732.md) --- # The strongest historical record of outperforming the market! From AI to HALO, U.S. energy stocks continue to have momentum after a surge According to Zhitong Finance APP, due to the Middle East war and investors selling off overvalued tech stocks, U.S. energy stocks are expected to outperform the market by the largest margin in history. The S&P 500 Energy Index has risen 39% so far this year in the first quarter, while the S&P 500 Index has dropped 7%. This sector has risen for 14 consecutive weeks, far exceeding the 9-week record set in 2007. Companies like Exxon Mobil (XOM.US) and ConocoPhillips (COP.US) are expected to achieve their best quarterly gains ever, with increases of over 40% in the first three months of this year. Since Venezuela welcomed new leadership in January and the outbreak of the war in Iran at the end of February, energy stocks and crude oil prices have continued to rise due to supply tightness caused by disruptions in the Strait of Hormuz and attacks on Middle Eastern energy facilities. Brent crude oil prices have surged 85% so far this year. "The energy sector has been overlooked, but now it is starting to gain attention, perhaps for less than honorable reasons," said Rob Thummel, senior portfolio manager at Tortoise Capital. "This is an awakening moment for investors, and perhaps the recent Iranian crisis has proven that, but energy is still very important." ![70f8a186577cb18508d2be7bb7b90332.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260331/1774962619130635.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Previously, energy stocks immediately rose after the U.S. overthrew Venezuelan President Nicolás Maduro and promised to take over and revitalize the country's oil industry. According to Menno Hulshof, head of research at TD Securities, **as investors begin to view the impact of artificial intelligence on certain companies more cautiously, they are turning their attention to so-called "HALO" trades (i.e., asset classes with heavy assets and low attrition rates), allowing the rise of energy stocks to continue.** "From a capital flow perspective, we see a significant amount of money moving from industries considered more vulnerable to the impact of artificial intelligence to many other types of high-risk industries, including the energy sector," Hulshof said in an interview. "In this context, we see valuations in these sectors soaring, and most of the sectors I focus on had already reached historical highs even before the outbreak of the Iranian conflict, which is definitely overvalued." **The sector has also performed well in markets outside the U.S.** The S&P/Toronto Stock Exchange Composite Energy Sector Index is expected to achieve the largest single-quarter gain in history, surpassing the S&P/Toronto Stock Exchange Composite Index, with companies like Canadian Natural Resources and Suncor Energy seeing stock price increases of over 45%. ![63c046a13d954b7b8628d22fbcd63638.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260331/1774962630893844.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) The last time energy stocks in the United States and Canada saw such a significant increase was in the first quarter of 2022—when the Russia-Ukraine war broke out. However, this excess return did not last long, and a year later, energy stocks began to decline. **Although geopolitical factors remain the main driver of oil prices, this time the situation is different.** "In 2022, everyone thought the world would quickly move away from its dependence on oil and gas," said Hulshof. "Now we are back in a market where people are starting to pay attention to those long-tail resources and believe their value far exceeds our previous expectations." Thummel from Tortoise Capital pointed out that since 2022, energy companies have improved their capital discipline and increased free cash flow yields, putting them in a better fundamental position. **Even if oil prices slightly retreat, energy companies are expected to benefit from higher oil prices.** Analysts predict that by 2026, Chevron (CVX.US), Exxon Mobil, and ConocoPhillips could see prices as high as $67 per barrel. Given that both WTI and Brent crude are trading above $100 per barrel, even a 30% drop in oil prices would still provide growth opportunities for these companies' earnings. Additionally, the growing demand for natural gas to power artificial intelligence data centers will also benefit these companies. Meanwhile, according to Matt Portillo, partner and research director at TPH&Co., a subsidiary of Perella Weinberg, producers and refiners are expected to see cash flow increases in the short term due to rising oil prices, and they may use this cash to gradually reduce debt or return capital to shareholders. **In the long term, the outlook for energy stocks is also improving.** Portillo noted that despite the ongoing war, the fundamentals for energy stocks still have room for growth due to the depletion of strategic petroleum reserves during the war, necessitating countries to replenish their reserves. Furthermore, U.S. shale oil production is expected to decline over the next decade, which will help support energy prices. Portillo said, "In the long run, these stocks are still cheap; in the short term, they have already risen a lot. If the war situation eases, it wouldn't be surprising to see some pullbacks, but that could be a healthy situation." ### Related Stocks - [VDE.US](https://longbridge.com/en/quote/VDE.US.md) - [UCO.US](https://longbridge.com/en/quote/UCO.US.md) - [EMLP.US](https://longbridge.com/en/quote/EMLP.US.md) - [MLPA.US](https://longbridge.com/en/quote/MLPA.US.md) - [IXC.US](https://longbridge.com/en/quote/IXC.US.md) - [XOP.US](https://longbridge.com/en/quote/XOP.US.md) - [RSPG.US](https://longbridge.com/en/quote/RSPG.US.md) - [CRAK.US](https://longbridge.com/en/quote/CRAK.US.md) - [COP.US](https://longbridge.com/en/quote/COP.US.md) - [MLPX.US](https://longbridge.com/en/quote/MLPX.US.md) - [XOMX.US](https://longbridge.com/en/quote/XOMX.US.md) - [IEO.US](https://longbridge.com/en/quote/IEO.US.md) - [UNL.US](https://longbridge.com/en/quote/UNL.US.md) - [IEZ.US](https://longbridge.com/en/quote/IEZ.US.md) - [OIH.US](https://longbridge.com/en/quote/OIH.US.md) - [BNO.US](https://longbridge.com/en/quote/BNO.US.md) - [XES.US](https://longbridge.com/en/quote/XES.US.md) - [XLE.US](https://longbridge.com/en/quote/XLE.US.md) - [UNG.US](https://longbridge.com/en/quote/UNG.US.md) - [USO.US](https://longbridge.com/en/quote/USO.US.md) - [FCG.US](https://longbridge.com/en/quote/FCG.US.md) - [TPYP.US](https://longbridge.com/en/quote/TPYP.US.md) - [XOM.US](https://longbridge.com/en/quote/XOM.US.md) - [AMLP.US](https://longbridge.com/en/quote/AMLP.US.md) - [OXY.US](https://longbridge.com/en/quote/OXY.US.md) - [IVV.US](https://longbridge.com/en/quote/IVV.US.md) - [BOIL.US](https://longbridge.com/en/quote/BOIL.US.md) ## Related News & Research - [The global energy order is breaking down](https://longbridge.com/en/news/284537393.md) - [TBH Global Asset Management LLC Raises Position in ConocoPhillips $COP](https://longbridge.com/en/news/284079584.md) - [Stocks may be missing this looming danger in the oil market](https://longbridge.com/en/news/284632891.md) - [Key facts: Energy Transfer Q1 Results May 5; Raises Distribution 0.7%](https://longbridge.com/en/news/284441385.md) - [Trump met with Chevron, other energy companies, on Tuesday](https://longbridge.com/en/news/284577500.md)