On paper, this should have been a clean win. Oil prices surged on geopolitical tensions around the Strait of Hormuz. Energy stocks looked like the obvious beneficiaries. And Exxon Mobil Corp (NYSE:XOM)—one of the world’s largest producers—should have been front and center.
Instead, the stock fell 9% in April, its worst month in a year.
That disconnect points to a bigger issue: higher crude prices don’t automatically translate into higher oil stock returns.
The Rally That Gave Back Gains
According to an April 29 note from JPMorgan, the energy trade has been more volatile than it appears. The firm said sector performance has “swung wildly” this year. Energy is still the top-performing sector year-to-date, up 26%, but has fallen since the market low—”effectively wiping out most of its …
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