For investors seeking momentum, iShares U.S. Oil & Gas Exploration & Production ETF (IEO Quick QuoteIEO - Free Report) is probably on the radar. The fund just hit a 52-week high and is up 39.2% from its 52-week low price of $78.70/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

IEO in Focus

The underlying Dow Jones U.S. Select Oil Exploration & Production Index is a free-float adjusted market capitalization-weighted index. The Index includes companies that are engaged in the exploration for and extraction, production, refining, and supply of oil and gas products. The product charges 40 bps in annual fees. The fund yields 2.42% annually.

Why the Move?

Oil prices surged recently to their highest levels since October as investors closely monitored escalating geopolitical tensions in key regions. WTI crude ETF United States Oil Fund LP (USO Quick QuoteUSO - Free Report) has jumped 22.8% this year (as of Apr 2, 2024) and the brent crude ETF United States Brent Oil Fund LP (BNO Quick QuoteBNO - Free Report) has gained 21.1%.

The Middle East witnessed heightened tension with indirect Iranian involvement, raising concerns about a potential impact on oil supply. Analysts warn of the possibility of direct Iranian involvement in the Israel-Hamas conflict, which could trigger a region-wide conflict with significant implications for oil supply. In a separate development, Ukraine conducted a drone strike on one of Russia's largest oil refineries in the Tatarstan region, as quoted on CNBC. With Russia being oil rich, such attacks are detrimental to global oil supplies.

More Gains Ahead?

Currently, IEO might continue its strong performance in the near term, with a positive weighted alpha of 30.42, which gives cues of a further rally.