No qualifying author-owned investment thesis was confirmed in this post.
Author discusses energy sector generally and warns caution, but never explicitly names XLE or any specific energy ETF/stock; a sector view cannot be mapped to an unnamed fund.
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As many of your know the SaaSpocalypse has created many refugees that are fleeing software and flooding/rotating into other sectors...like energy. Energy has surged these past six weeks...but many of these energy investors are new and don't realize the danger they are getting into.
The EIA just today lowered the price estimate for Brent oil...and most notably their estimate for 2027 dropped previously from $58 last month to $53 this month. That's bad.
[https://www.eia.gov/outlooks/steo/](https://www.eia.gov/outlooks/steo/)
Simply put there has been over-investment in oil (and to a lessor extent gas) and now these investments are starting to fruit. We're currently at a 3.1 million b/d surples and that just isn't sustainable. There is only so much midstream capacity to go around. Once that fills up we could get a "tank top" event where prices completely crash. That's more likely for 2027, but could happen in 2026.
The big fear for investors is that oil is running artificially high in anticipation (dare I say hope) for an Iran war...but if that fizzles out, prices will go down and fast.
If you're looking to invest in energy stocks, just be very careful. This industry could implode soon.