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Home » Energy, the new momentum trade? Why its strong gains can increase from here

Energy, the new momentum trade? Why its strong gains can increase from here

Energy stocks have been on a tear recently, with many investors dubbing it the new momentum trade. This sector has seen strong gains in recent months, and experts believe that these gains could continue to increase in the coming months.

One of the main drivers behind the recent surge in energy stocks is the rebound in oil prices. After plummeting to record lows in the wake of the COVID-19 pandemic, oil prices have steadily climbed back up as economies around the world have started to reopen and demand for oil has increased. This has lifted the fortunes of energy companies, many of which were struggling just a year ago.

Another factor contributing to the strength of the energy sector is the increasing focus on renewable energy and clean technology. As the world looks to transition away from fossil fuels and towards more sustainable forms of energy, companies that are involved in renewable energy production and clean technology are seeing increased interest from investors. This has helped to propel the entire energy sector higher, as investors look for ways to capitalize on the transition to a greener economy.

In addition, the global economic recovery is also playing a role in the strength of the energy sector. As economies around the world continue to bounce back from the pandemic-induced downturn, demand for energy is expected to increase. This bodes well for energy companies, which stand to benefit from higher demand for their products and services.

Overall, the energy sector is currently experiencing a perfect storm of positive factors that are driving strong gains in energy stocks. With oil prices on the rise, increased focus on renewable energy, and a global economic recovery underway, there is plenty of reason to believe that the momentum in the energy sector could continue to build in the coming months.

Investors looking to capitalize on the strength of the energy sector may want to consider adding energy stocks to their portfolios. With strong gains already seen in the sector and the potential for further increases in the future, now could be a good time to jump on the energy bandwagon. As always, investors should do their own research and consult with a financial advisor before making any investment decisions.