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US Energy stocks are surging this morning on the heels of the continued ramp in WTI - now nearing $72 - as a tougher US stance on Iran sanctions (and a massive crude draw reported by API overnight) is trumping Saudi production ramp headlines.

“Saudi Arabia faces the daunting, if not impossible, task of managing the oil market; prices are going to stay elevated,” said Victor Shum, a vice president at consultants IHS Energy. “The uncertainty over Iranian crude supply is going to cast a shadow over the oil market. The cut in supply may be even bigger than thought, depending on how successful the U.S. is in getting countries not to buy Iranian oil.”

XLE is on track for the best quarter since 2011...and broke above its 50DMA today...

 

However, while energy stocks are ramping today, they don't seem convinced that crude's gains will hold...