Energy sector ETFs are off to a strong start in 2013 with crude oil prices rising above $98 a barrel for the first time since September.

Energy Select Sector SPDR (NYSEArca: XLE) is up 9.2% so far this year, compared with a gain of 5.8% for SPDR S&P 500 ETF (NYSEArca: SPY), according to investment researcher Morningstar.

“The energy sector is surging on a relative basis,” says Investors Intelligence technical analyst Tarquin Coe.

“The ratio of the XLE versus the S&P 500 is developing a potential bottom. That base would confirm on a break above the September relative high,” he wrote in a note Wednesday. “Should that occur, the ratio would be forecast to rally to at least the high from February last year, equating to some 7.5% of outperformance. Investors should be overweight the sector.”

U.S. Oil Fund (NYSEArca: USO) has gained 22% from its 2012 low. [Oil ETFs Continue Ramp]

Crude futures in New York rose above $98 a barrel on Wednesday after bottoming around $81 in June of last year.

Full disclosure: Tom Lydon’s clients own SPY.

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