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Cenovus is among the best-positioned of Canada’s oil-sands producers, to take advantage of gains in Foster Creek SAGD oil sands operations near Cold Lake, Alberta, July 9, 2012.TODD KOROL/Reuters

Canadian energy stocks are finally playing catch-up with sizzling oil markets.

In the past four weeks, the S&P/TSX capped energy index, which includes big names such as Cenovus Energy Inc., Suncor Energy Inc. and Canadian Natural Resources Ltd., has climbed 9 per cent as U.S. crude prices approached, then rocketed above, $100 (U.S.) a barrel.

The gains come as companies prepare to deliver second-quarter financial results that in many cases will display rich rewards from a steady improvement in heavy crude prices that has accompanied the run-up in the West Texas Intermediate light oil benchmark.

There could even be potential acquirers running the numbers on deals after a long hiatus, to take advantage of still-discounted values.

"I think people with a longer-term view are eyeing this sector, and from a strategic standpoint or a market standpoint, it's looking pretty attractive," said John Stephenson, senior vice-president and portfolio manager at First Asset Capital Corp.

Just six months ago, the industry was heavily pressured by fears of a protracted "bitumen bubble" – a price-killing glut of oil sands-derived crude caused by insufficient export pipeline capacity. It has since enjoyed an unexpected bitumen bounty. Overall supply has lagged expectations, new demand is coming from a major U.S. Midwest refinery and railways have been carting away increasing volumes of crude, easing pipeline congestion.

Last week, Western Canada Select heavy blend sold for more than $90 a barrel for the first time in about 10 months, up from around $50 at times in January.

A major structural change is also sweeping the broader oil market, as North America's WTI, deeply discounted from global prices as recently as last winter, has crept back.

On Friday, it briefly sold for a higher price than Brent oil, the international benchmark, for the first time in almost three years after several weeks of larger-than-expected drawdowns in U.S. oil inventories.

Still, shares of Canada's oil-weighted producers stagnated until late June, when WTI started its steady run from below $94 a barrel to Friday's settlement of $108.05. With the weak market came a drought in merger and acquisition activity and equity financing, both of which tend to fuel investor interest.

The sector was priced as if oil was still hovering in the $80 a barrel range, as investors fretted over broad equity market weakness and industry-specific issues such as uncertainty about the fate of transport projects like the Keystone XL pipeline to Texas refineries from Alberta, Mr. Stephenson said.

The question now is just how much traction the rebound has following a few short-lived upticks over the past year. Indeed, despite the recent rise, many big-name energy stocks prices are still at or below their levels at the start of 2013, said Martin Pelletier, portfolio manager and managing director of TriVest Wealth Counsel. Suncor , which began the year at $32.71, now trades for $33; Canadian Oil Sands shares have moved up just 35 cents this year, to $20.52.

"We've been getting the yo-yo effect, these false starts," Mr. Pelletier said. It will take two to three months to determine if the dog days are done, "otherwise guys will just start taking profit again," he said.

Cenovus, which reports second-quarter results on Wednesday, has climbed 11 per cent since the sector's latest run began on June 25. It is still down about 3 per cent year-to-date.

The oil sands producer is among the best-positioned to take advantage of gains in heavy oil pricing, especially as it seeks out new avenues to move its growing output to market. In a report last week, TD Securities said Cenovus's shares have been hurt partly by a flight of U.S. money from its shareholder base.

Among other companies with large exposure to the dramatic swings in crude prices, Canadian Natural has gained 17 per cent, Suncor 8.5 per cent and Baytex Energy Corp. 18 per cent in the last month.

Among the large caps, Talisman Energy Inc. is often mentioned as a takeover target as it seeks to sell at least $2-billion of assets in the next year under Chief Executive Hal Kvisle.

Last week, Canaccord Genuity analyst Phil Skolnick wrote that he believes the company is moving toward a sale with the addition of new board members with oil and gas experience and after Kvisle's recent acknowledgment that he does not see himself as permanent CEO.

Talisman is scheduled to report its second-quarter results on July 31.