The stock market picked up more ground on Tuesday, with investors feeling more comfortable about the prospects for a full economic recovery from the coronavirus pandemic. Major market benchmarks closed near their best levels of the day, and gains for the Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^SPX), and Nasdaq Composite (NASDAQINDEX:^COMP) were as much as 1%.

Today's stock market

Index

Percentage Change

Point Change

Dow

1.05%

268

S&P 500

0.82%

25

Nasdaq Composite

0.59%

56

Data source: Yahoo! Finance.

A lot of investors have focused their attention on some of the high-flying stocks in the technology industry that have managed to weather the COVID-19 outbreak without any real damage. But that's allowed an important move to fly under the radar, as energy stocks have made a powerful recovery from their worst levels.

Energy makes a comeback

The energy sector was the best performer in the U.S. stock market on Tuesday, and big-name players saw some sizable gains. ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) were both up just about 2%, but Occidental Petroleum (NYSE:OXY) saw a much bigger move of more than 6%.

Gravestone with flowers near it, and trees and other graves behind.

Image source: Getty Images.

Gains were evident in various subsectors of the industry as well. Refiners fared well, with Holly Frontier (NYSE:HFC) leading the way higher with a gain of 5% and Phillips 66 (NYSE:PSX) managing to pick up about 3.5%. Moves in the oil services arena were also impressive, as Halliburton (NYSE:HAL) picked up 6% and Baker Hughes (NYSE:BHGE) followed with a 5% move higher.

Even beaten-down stocks tracking the price of oil did reasonably well. United States Oil Fund (NYSEMKT:USO) managed a gain of about 3.3%.

What's behind the move?

It should come as little surprise that movement in crude oil prices was behind the excitement in energy stocks. West Texas Intermediate near-month futures climbed more than 4% on the day, pushing the price up to around $37 per barrel. Brent crude, which is more popular for international trading purposes, climbed to the brink of $40 per barrel.

Two things are supporting oil prices. First, as economic activity levels start to return to normal, the big glut of unused energy products is starting to work itself down. Long gone are the anomalies that sent gasoline prices below $1 per gallon in some areas, and as people start driving to work again, demand should help to put a floor under prices at the pump.

In addition, OPEC is slated to meet later this month to discuss further moves to set levels for oil production. With the possibility of extending the cuts that oil exporting countries set in April, markets are trying to prepare for extreme volatility in the prices of energy commodities.

Oil stocks still have a long way to go before they can reclaim all the ground that they've lost, and investors seem reluctant to believe that a rebound in crude prices will last. That could leave the door open to even more positive returns for investors courageous enough to dip their toes in the energy market right now.