Market Extra: A popular energy fund is on the verge of its longest win streak ever, as oil rockets up

The U.S. oil benchmark hit a 3 ½-year high around $72 Thursday, helping to put a popular fund that tracks oil-related companies on pace for its longest period of uninterrupted gains ever.

The Energy Select Sector SPDR ETF XLE, +1.51% rose 1.5% on Thursday, notching its 10th straight gain—its longest winning streak since an equal stretch ended July 5, 2006. Moreover, if it books one more positive session, it would mark the best winning run for the XLE on record, according to data from FactSet and WSJ Market Data Group.

Read: Here’s why U.S. oil is trading at its biggest discount to the global crude benchmark since 2015

The run-up for XLE, which tracks some of the biggest oil production companies and refiners, including Anadarko Petroleum Corp. APC, +1.17% Valero Energy Corp. VLO, +4.10% Hess Corp. HES, +2.45%  ConocoPhillips COP, +1.16% and Exxon Mobil Corp. XOM, -0.17% has rallied 8.9%, so far this year. That compares with a slight decline of 0.02% for the Dow Jones Industrial Average DJIA, -0.22% a rise of 1.7% for the S&P 500 index SPX, -0.09%  and an advance of 6.9% for the Nasdaq Composite Index COMP, -0.21%

The rally comes as West Texas Intermediate crude oil on the New York Mercantile Exchange CLM8, +0.10% trades at levels last seen in 2014, flirting with a fresh round-number level at $72 a barrel. Meanwhile, Brent oil LCON8, +0.37% the international benchmark, shot past another psychological level to briefly trade above $80 a barrel. Both WTI and Brent oil are on pace to post a nearly 20% year-to-date rise and are hovering around 3½-year highs.

The recent gains were underpinned by the U.S. decision to impose fresh sanctions on Iran, a member of the Organization of the Petroleum Exporting Countries and one of the world’s largest exporters. That added to an uptrend that began in late 2017 as efforts by OPEC and other major producers to curb output was seen helping to work off a global crude glut that had weighed on oil since a mid-2014 collapse in prices.

Most of the XLE’s components are enjoying triple-digit, year-to-date gains, however, returns for the fund are being held in check by lagging performance in one of its biggest components Exxon, down 2.1% so far in 2018, with the energy giant accounting for 23.25% of the XLE’s value.

XLE has the potential to mark its best quarterly return, up nearly 17% so far during the second quarter, since the fourth quarter of 2011, according WSJ Market Group Data.

—Michael DeStefano contributed to this article

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