Energy sector outperforms S&P 500 in Q3 as oil prices rise

• Energy sector (XLE) led all sectors in Q3, up 16% as Middle East conflict spiked oil near $100/barrel • Refiners Marathon Petroleum and Valero were top gainers on expanding refining margins • Texas Pacific Land and EQT lagged on weak land/water revenue and soft natural gas prices The energy sector (XLE) gained 16% in Q3, far outpacing the S&P 500's 2% rise and ranking as the top-performing sector. Expanding Middle East conflict squeezed global oil supply, pushing prices near $100/barrel; crude oil futures rose nearly 32% for the quarter. Persistent inflation also led the Federal Reserve to hike rates for the first time since 2023. Analyst Multiplo Invest noted that despite recent signs of de-escalation around Hormuz, tight global oil inventories mean prices will be slow to retreat even if tensions ease. Marathon Petroleum (MPC) was the quarter's biggest winner, up nearly 48%, followed by Valero Energy (VLO), up 45%. Both refiners benefited from expanding margins amid supply disruptions tied to Middle East tensions and the Ukraine war. Texas Pacific Land (TPL) was the biggest laggard, down 20%, after missing on land-sale revenue and water services income. EQT (EQT) fell 7% as natural gas prices came in below expectations.