FXStreet reports that in the view of economists at Charles Schwab, a confluence of factors has increased the likelihood for the energy sector to outperform the overall market.

“The ongoing recovery of the global economy bodes well for rising oil demand. Supply remains constrained by OPEC and cautious producers, and inventories are down – driving oil prices higher.”

“The expansion phase of the business cycle can support cyclical-value energy companies, and large diversified energy companies are becoming more disciplined with expenses and investment. Meanwhile, attractive valuations are reinforced by rising earnings expectations.”

“Except for some near-term headlines noise and measured rise in regulations, however, a dramatic impact from the clean energy movement on the energy sector landscape is likely years away.”

“Weighing the issues, we believe the Energy sector is poised to outperform during the next three to six months.”