Energy stocks surging now, but RJ's Molchanov says it won't last


The energy sector (XLE +1.9%) is enjoying a boost from rising oil prices (USO +0.9%), but Raymond James analyst Pavel Molchanov doubts the gains can last, pointing to similar fears in 2003 and 2011.

In the run-up to the invasion of Iraq in 2003, oil prices rose steadily and peaked a few days before the invasion but then began to slide; 60 days after the invasion, prices were 23% lower than at the peak.

A similar pattern is seen in the 2011 NATO intervention in Libya, as prices rose for a month after NATO airstrikes began but then rolled over; after 60 days, prices were 14% lower than at the peak.

Ben Levisohn of Barron's calculates XLE fell ~4.9% in the 60 trading days after the start of the airstrikes on Libya.

ETFs: ERX, VDE, DIG, UCO, OIL, BNO.

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