“This high price as compared with expected earnings comes despite a major comeback for energy profits; the sector is on track to report 790 percent net income growth this quarter from the first quarter of 2016, according to FactSet estimates. Energy is also reporting the highest year-over-year earnings growth of any sector, according to FactSet,” according to CNBC.

Rig counts have recently ticked higher and with credit and earnings issues improving for some U.S. shale drillers, those companies may seize the opportunity to exploit higher pricing in the near-term. Some traders are not convinced and caution about betting on an energy sector rebound.

Some technical analysts believe that if XLE drops below $65, selling pressure could intensify, sending the big energy ETF lower in the process.

The challenge for energy equities is that some oil market observers see more declines coming for crude. Oil traders are concerned over how fast U.S. shale oil producers will increase production to capture the rising prices.

For more information on the oil market, visit our oil category.