Executive Summary: XLE shares (energy stock ETF) recently peaked in June 2022 when oil prices also peaked at $122/barrel. It was at this point that the government started releasing 1MM barrels/day from the strategic petroleum reserves (SPR), and we see a corresponding decrease in oil prices subsequently. 

However, investors have not been fooled by this artificial reduction in oil prices because of the SPR release. This explains why the share price of XLE has steadily declined since the June peak. Investors know that the price of oil will rebound to previous highs when the SPR release ends at the beginning of November just in time for the mid-term elections!  Consumers cannot cope well with oil at $122/barrel and gas at $5+ a gallon, especially as the country enters into peak heating season (further aggravating petro demand). This has negative implications for the economy, oil demand, and ultimately oil stocks.

Energy Stock Index vs Oil Prices

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