Oil is continuing its weeklong rally Monday, as WTI Crude is up 3.57% to $47.32 a barrel in afternoon trading. At the stock level, U.S. explorers like Apache (APA) , multinational producers like Exxon Mobil (XOM) and ETFs like the Energy Select Sector SPDR (XLE) are all higher.

The encouraging movement is coming despite the fact that no one knows for sure what energy policies U.S. President-Elect Donald Trump will pursue once he takes office or whether the member states of the Organization of the Petroleum Exporting Countries (OPEC) will be able to agree on a production cut when they meet in Vienna at the end of the month.

"The markets are signaling that the political considerations aren't very significant," Oppenheimer head of technical analysis Ari Wald said in a phone interview. "Or that they've already been priced into an oil market that's gone from over $100 [a barrel] in 2014 to $47 now."

In a research note circulated to investors Monday, Wald argued that energy sector stocks are poised to break out if the U.S. stock market continues its year-end rally.

Central to his thesis is the point that WTI Crude has gained post-election even as the dollar has rallied, upending the traditional inverse relationship between the two. The U.S. Dollar Index (DXY) was actually down slightly Monday.

"It's looking at these two markets and asking 'Which is the outlier?,'" Wald said. "For us, seeing inflation expectations rise, interest rate [hike] expectations, stocks... to us, it's the oil strength that falls in line with what we're seeing elsewhere."

If the Federal Reserve's Open Market Committee raises interest rates when it meets in December, as is widely expected, the ensuing dollar selloff could give oil an additional tailwind in trading, Wald said.

The oil and gas industry has taken a big hit in a global economy that has been forced to contend with low yields on investments and lower interest rates. Oversupply concerns, cratering demand, and the ensuing global drop in commodity prices has led to a spate of oil and gas bankruptcies domestically and political squabbling abroad.

Yet the market has slowly recovered since bottoming out in the earliest months of 2016 - and Wald sees potentially more gains ahead if current trends hold.

"We could see $60 oil coming in 2017," he said.

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