Their offense, so far, has been below average. Baltimore's scoring 4.26 runs/game (AL average is 4.43), good for eigth in the league. The pitching side is where they've done their damage. Their team ERA is 3.67, fourth best in the AL. They're also among the best in BB rate, WHIP and K/BB. Baltimore's defense is another solid aspect of their club. Despite being near the bottom in fielding percentage (which we know doesn't really tell us much), they are among the best in FRAA (Fielding Runs Above Average), where they've saved 17 runs. (The Yankees, despite leading the league in fielding percentage, are the second worst in FRAA, at -28.)
Though the O's are 10 games over .500, at 41-31, they've scored only four more runs than they've allowed, giving them a significantly different pythagorean record (36-36). That right there should indicate that they've been fairly lucky.
Adam Jones stands out as Baltimore's best position player, contributing a 145 OPS+ to go along with above average CF defense. The other solid hitters in the lineup, at this point, include Matt Wieters, Chris Davis, Wilson Betemit(!) and Nick Markakis. They've been done in by the likes of Robert Andino (69 OPS+) and Endy Chavez (11 OPS+), who have combined for more than 360 plate appearances.
What the Orioles do have in spades, though, is consistency among the starting pitchers. And by that I mean they've been durable. All but one start has been made by the same five pitchers. By comparison, the Yankees have had six starts made from pitchers not currently in the rotation (four by Freddy Garcia, two by David Phelps).
Despite a solid team ERA, the reason they're winning is primarily the bullpen. Only two starters have sub 5.00 ERAs, while four relievers (with at least 30 IP) have sub 2.00 ERAs. Jim Johnson has excelled to this point as the closer; despite a low K-rate (5.5/9), he's held batters to just four hits per nine innings. Along with Pedro Strop, Luis Ayala and Darren O'Day, Johnson has provided excellent relief and has helped Baltimore to their current record.
The rotation is fronted by Jake Arrieta (94 IP, 5.55 ERA), who's been disappointing so far, but he's followed by the surprises Jason Hammel (90 IP, 2.61 ERA) and Wei-Yin Chen (85 IP, 3.38 ERA). The last two spots are occupied by Tommy Hunter (77 IP, 5.70 ERA) and Brian Matusz (76 IP, 5.00 ERA).
The lineup has some nice hitters, but certainly isn't scary, and the rotation has a few good arms and a lot of potential, but isn't there yet. It's the bullpen that has separated the O's from the clubs behind them.
I don't see the lineup changing much. What it is right now is pretty much what you're going to get. But I do see the rotation and bullpen flipping a bit. Arrieta and Matusz will pitch better while the relief corps will take a step back. Ultimately, Baltimore will play well, and could be a force in the AL very soon, but not quite yet. I foresee them finishing above .500, but only by a handful of wins.