Dear Reader,
In 1982, something happened in China that changed everything.
The government did something that seemed impossible at the time.
They took a fishing village of 30,000 people...
And transformed it into a modern technological powerhouse that generates $475 billion in GDP each year.
That’s bigger than the economic output of Norway and Denmark.
And here's what most Americans don't know ...
China has done this 20 more times since then...
While we haven’t done anything like this since the birth of Silicon Valley..
Something just changed. Something big.
And when you see what President Trump quietly set in motion, you'll understand why a handful of stocks could explode higher in the months ahead.
Click here to discover what's coming.
Marc Lichtenfeld
Chief Income StrategistThe Oxford Club
P.S. Three tech billionaires are already positioning for this. One recently broke ground on a project that looks suspiciously like what I'm about to show you. See the evidence here.
Oil Prices May Fall to $55 by 2026—Bad News for This Energy ETF
Authored by Jordan Chussler. Posted: 12/9/2025.
Article Highlights
- The EIA forecasts oil prices will fall over 20% by the end of 2026 due to a sustained global supply surplus.
- The Energy Select Sector SPDR ETF (NYSEARCA: XLE), heavily weighted in ExxonMobil, Chevron, and ConocoPhillips, faces continued underperformance.
- Institutional sentiment is tepid, with high short interest and nearly equal numbers of buyers and sellers over the past year.
After what has been a trying year for the energy industry, forecasts for the year ahead do not offer much reprieve for fossil fuel companies or their shareholders.
According to the U.S. Energy Information Administration (EIA), the industry is facing a supply glut that will carry into 2026. The agency's short-term forecast, issued last month, expects crude oil prices to end next year about 20% lower than where they stand today.
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That's bad news for the State Street Energy Select Sector SPDR ETF (NYSEARCA: XLE), which some bullish investors had hoped would bounce back in 2026.
Oil's Bleak 2026 Forecast Means Lower Profits
As a whole, the energy sector's uninspiring 7.21% year-to-date (YTD) gain has trailed the broad market while ranking fifth-worst among the S&P 500's 11 sectors. That follows a 2024 gain of just 5.7% and a 2023 loss of 1.3%.
Zooming out, the highly cyclical energy sector has finished second-to-last or dead last among all sectors seven times in the past 11 years.
When the EIA published its 2026 short-term outlook in November, it signaled that oil's ongoing surplus is poised to keep downward pressure on prices at least through the first half of 2026, and in turn temper the performance of oil stocks and exchange-traded funds (ETFs) exposed to the fossil fuel industry.
The price of Brent crude—the benchmark for prices in Europe, Africa, and the Middle East—has fallen more than 16% in 2025.
West Texas Intermediate—the U.S. benchmark—has fared worse, losing nearly 18% this year.
The EIA sees more than 20% downside over the next year, writing that it expects "global oil inventories to continue to rise through 2026, putting downward pressure on oil prices in the coming months."
Compounding matters, the agency's price target for Brent crude by the end of 2026 is $55 per barrel. That would match a five-year low set in January 2021. Relative to oil's June 2022 high of $118.49, this would represent a nearly 54% decline.
Importantly for investors, the EIA's 2026 outlook suggests that lower crude prices—which drive the largest component of retail gasoline and diesel costs—will translate into lower profits for producers and, therefore, reduced upside for shareholders.
The XLE's Basket of Highly Concentrated Big Oil Stocks
While the XLE is technically a State Street sector fund, its focus on a single industry—and the concentration of its weightings—makes it operate more like a single-track thematic ETF.
The XLE, which holds a basket of fossil fuel stocks including the oil majors, is currently down 0.04% over the past year. At present, there's little reason to expect a material change in performance over the next year.
The fund's major holdings result in far less diversification than investors could get through sector ETFs that, for example, track communication services. Instead, the XLE's singular focus on the oil, gas, and consumable fuels industry has left its top three positions—ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), and ConocoPhillips (NYSE: COP)—accounting for an astounding 48.1% of the fund's allocations. Put another way, nearly half of every dollar an investor puts into the fund is allocated to just three companies.
Over the past year those three stocks on their own have failed to live up to their weightings. ExxonMobil has returned 2.73% to investors over that time frame, Chevron has lost more than 5%, and ConocoPhillips is down nearly 10%.
Further down the list, some XLE positions have performed better. Williams Companies (NYSE: WMB) and Marathon Petroleum (NYSE: MPC), which round out the top five, have gained nearly 24% and more than 13% over the same period. However, their combined weighting of 8.14% isn't enough to offset the underperformance of the fund's top three holdings.
Wall Street Isn't Sold on the XLE's Recovery
Of course, past performance is never indicative of future results. But when accounting for the EIA's outlook and OPEC+'s expectation of unchanged demand from 2025 to 2026, more of the same is likely in store for oil.
That's something Wall Street is watching. Over the past 12 months, the XLE has seen the number of institutional sellers (1,175) nearly match the number of institutional buyers (1,342).
Meanwhile, current short interest in the fund stands at a significant 12.68% of the float. The ETF's dividend, which currently yields 6.34%—or $2.88 per share annually—may offer a silver lining to hopeful shareholders.
But given the macro challenges facing the XLE's largest holdings, even income-focused investors may grow impatient with the Big Oil fund.
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