The Energy sector ranks eighth out of the ten sectors as detailed in my Sector Rankings for ETFs and Mutual Funds report. It gets my Dangerous rating.

Energy ETFs outperformed the overwhelming majority of competing sector investments in the previous bull market (10/02-10/07). In the early part of the run, the war in Iraq boosted the demand for shares. In the later stages of the rally, emerging economic growth fueled speculative excesses in both the price of oil as well as desire for ownership in exploration and/or oil services companies.