U.S. Energy Stocks Rally Most in 17 Months as Crude Surges

(Bloomberg) -- Out-of-favor energy stocks are getting some attention.

The S&P 500 energy index rose as much as 3.8 percent, the most since November 2016. Shares advanced along with a 3.3 percent rally in West Texas Intermediate crude futures, as China struck a conciliatory tone on trade and Saudi Arabia was said to seek higher prices.

Energy stocks have been vying for love as investors continue to overlook the sector, though analysts have expressed more bullish tones as of late. Credit Suisse’s chief U.S. equity strategist Jonathan Golub raised the industry’s rating to market weight from underweight late in March.

It’s plausible today’s advancers are benefiting from a short squeeze. Diamond Offshore Drilling Inc., whose short interest is over 40 percent of float, gains as much as 8 percent intraday.

To contact the reporter on this story: Michael Bellusci in Toronto at mbellusci2@bloomberg.net.

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Steven Fromm

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