NEW YORK (TheStreet) -- As tension in the Middle East -- including the latest fighting in Iraq, has risen this year, oil prices have spiked higher, leading to a strong, lengthy bull run in the Energy Select Sector SPDR (XLE), an exchange-traded fund that tracks the energy sector.
XOM data by YCharts
Brent oil, represented by United States Brent Oil Fund (BNO), has been the catalyst for energy sector leadership.
Brent futures broke to more than $115 in last week's trade for the first time in 2014. Concerns of supply disruptions in Iraq supported oil prices. Many Iraqis were killed during a battle in the provincial capital Baquba.
The civil war in Iraq shows no sign of ending soon as the Sunni insurgents continue to gain ground.
XLE data by YCharts
The correlation between Brent oil and the energy sector is very strong, meaning the two assets rise and fall in price together.
Studying the past five years of price data, there is a clear trend that emerges between when oil prices spike and how energy stocks react.
The overall price of oil does not seem to matter. Rather, it's the percentage price change of oil. For example, when oil futures spiked 10% higher over the past month, energy stocks followed for a 10% increase of their own.