Oil prices have risen for five consecutive days, energy stocks are leading the rise in US stocks. What is the market anticipating?

Recently, with the continuous rise in oil prices, U.S. Energy Corp. stocks have also strengthened, becoming the stock with the highest increase this week. As of Friday, the price of West Texas Intermediate (WTI) crude oil rose by 1% to $73.86 per barrel, while Brent crude oil rose by 0.6% to $76.38 per barrel, both expected to reach a new high since October last year. The rise in oil prices is mainly due to market expectations of the energy policies that the incoming Trump administration will implement. Analysts believe that Trump may increase sanctions on Iran, Venezuela, and Russia, thereby reducing global crude oil supply. According to RBC Capital Markets' forecast, these sanctions may reduce global daily crude oil supply by 1 million barrels. The rise in oil prices has driven the strength of energy stocks. As of January 3, BP p.l.c. Sponsored ADR (BP.US) stock has risen for 9 consecutive trading days, accumulating a total increase of 7.3%. Chevron Corporation (CVX.US) stock, after declining in early December, has also begun to rebound, with a 3% increase in the past week. However, analysts warn investors not to be overly optimistic about energy stocks. It is worth noting that Trump has called for increased "oil drilling" in the U.S., which may lead to oversupply and a subsequent fall in oil prices. Roth MKM analyst Leo Mariani said: "The major upside risk is the Trump administration implementing broader and harsher sanctions and other international issues." Henning Gloystein, the head of the energy, climate and resources department at Eurasia Group, also pointed out that the increase in crude oil supply by 2025 and weak demand growth could put downward pressure on oil prices, especially after OPEC begins to reduce production cuts. Analysts believe that while political factors may push up oil prices in the short term, the fundamentals of supply and demand are the key factors determining the industry's outlook in the long term. Currently, OPEC is still implementing production cuts of over 500,000 barrels per day, which far exceeds Iran's total oil production. Historical experience shows that in the presence of such a large-scale idle production capacity, it is difficult for energy stocks to outperform the market. This article is reproduced from "Wall Street News", edited by GMTEight: Xu Wenqiang.