Analysts at BTIG and Oppenheimer noted the recent momentum in energy stocks in memos on Monday, with the firms saying they see further upside ahead.
Oppenheimer stated in its brief note that against a market grind, key action last week included a fresh breakout for energy.
Even so, the firm is "unsure if the US Dollar is weak enough to support a super-cycle in commodities" and reiterated its Market Weight exposure to the sector in belief bottom-up selection should outperform range-bound oil prices.
"From a trading basis, the breakout indicates new demand for the sector and a likely continuation of strength," wrote analysts at Oppenheimer.
Meanwhile, BTIG highlighted the fact that energy is now the second-best sector for the year-to-date and by far the best over the last month.
"Over the last year, however, it's lagging SPX by ~14%. Therefore, it's not in many momentum funds, which often use 12m performance," analysts at BTIG mentioned. "For instance, it's only a 1.38% weight in the MTUM, which will rebalance in May. This suggests there is likely more upside for the group, as it just broke out of a two-year base with relative strength turning up."