Oil stocks are finally playing catch up as the energy sector has become one of the best performing sectors of the market this year, according to Morgan Stanley.
"An improving macro backdrop has started a catch-up trade for Energy," analyst Devin McDermott told clients in a research note Thursday.
The sector lagged the broader market last year as crude sagged, but is now following oil prices higher.
The sector is outperforming the broader market with energy up 12.5% year to date while the S & P 500 is up 10.1%.
Morgan Stanley upgraded the entire sector to overweight early this week.
Persons:
Morgan Stanley, Devin McDermott, McDermott
Organizations:
Energy, Brent, Morgan, ConocoPhillips, Occidental
Locations:
Diamondback, Devon, Brent