2026-02-16 23:19:59

$XLE

Right now the setup is quite bullish. It broke out and keeps going without slowing down.
There are rumors in the background about a comprehensive deal between the U.S. and Russia, and if this ends with sanctions being loosened, XLE can face near term selling pressure.
Right now, energy markets are expecting a supply surplus for 2026. If a deal happens and sanctions on Russian oil/gas are lifted, Russia can supply global markets (especially Western markets) much more easily and in higher volumes. Extra Russian supply entering a market that’s already expected to be well supplied can push Brent and WTI sharply lower. Since XLE is highly correlated with oil prices, a drop in oil prices can negatively impact XLE stocks (Exxon, Chevron, etc.).
On the other hand, if the U.S. strikes Iran and things get messy, Strait of Hormuz fear can spread, and maybe what’s feared can happen. Since roughly 20%–30% of global oil supply passes through that strait, panic can emerge on supply shock fears, and XLE can see a very sharp upside move.

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