According to Zhitong Finance, the energy sector has emerged as the star performer of the S&P 500 index in early 2025, overcoming its two-year lag in the market, despite Wall Street's pessimistic outlook on oil and gas stocks. The S&P 500 energy index has gained 2.2% so far this year, leading all 11 sectors of the S&P 500, outperforming the 0.4% rise of the S&P 500 index.

BTIG analyst Jonathan Krinsky noted in a report that the energy sector has transformed from "worst to first" due to the strong performance of natural gas stocks, with natural gas stocks "displaying clear leadership" as commodity prices rebound from multi-year lows. To date, the First Trust Natural Gas ETF has risen 3.8% in 2025, outperforming the overall energy index of the S&P 500.

Krinsky pointed out that the energy sector was the only one that fell in 2023 and 2024, while the S&P 500 index rose 53%. Despite Wall Street's concerns about oil and gas stocks, the market still rose.

RBC Capital Markets downgraded the sector from "overweight" to "hold" on Wednesday, with Lori Calvasina, head of U.S. equity strategy research at the firm, saying that the firm's analysts have the most bearish assessment of the global energy sector. Ned Davis Research also downgraded the sector last December, citing the difficulty of maintaining the rise in oil prices.

As demand sentiment remains weak, Brent oil prices may further decline. The top 10 Wall Street investment banks including BofA, Morgan Stanley, JPMorgan, Goldman and Citigroup still expect Brent oil prices to further fall to around US$70 by the end of this year.