Energy sector is strong but difficult to predict

The energy sector has performed strongly over the past three months, driven by crude oil price rises. It was the top performing area of the market for the three months to 8 March 2002 with a return of 12.2% on the MSCI index compared to a world index return of 0.3%. This run of strong performance has led to stocks in the sector reaching a level where many managers see them as overvalued. Some of this is due to an increase in the price of crude oil, says Pauline McPherson, global fund manager at Standard Life Investments, but she argues that there is not much value to be added in p...