The Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy ETF, jumped by about 4% last week in what is perhaps the latest sign that the energy sector rebound is proving legitimate.

Some market participants believe energy stocks will show more responsiveness to oil’s rally. Market observers and analysts argue that U.S. energy stocks are in a position to outperform broader equity markets this year, even if oil prices don’t move higher. The energy industry has grown more efficient after cutting costs in response to the plunge in crude oil prices in previous years, so they are now in a better position to improve revenue at lower oil prices.

Credit Suisse “upgraded the energy sector late last month to Market Weight after four years of underperformance, and (analyst James) Wicklund says that we’re seeing signs of a true turnaround at long last,” reports Teresa Rivas for Barron’s.

Market observers and analysts argue that U.S. energy stocks are in a position to outperform broader equity markets this year, even if oil prices don’t move higher. The energy industry has grown more efficient after cutting costs in response to the plunge in crude oil prices in previous years, so they are now in a better position to bolster revenue even at lower prices.

Related: Once Sluggish Energy ETFs Gain Momentum

Inside the Energy Rally

Credit Suisse’s Wicklund “cites capital discipline in the energy and production space–a trend we’ve noted as well–as there’s not been a knee-jerk reaction to raise spending with higher oil prices, as management teams focus on returns on investments and capital,” reports Barron’s.