To The Moon

🌟🌟🌟Russia has just announced that it will ban the supply of crude oil and oil products from February 1 2023 for 5 months to countries that abide by the cap.  These  countries include the US, the European Union and Australia.

That means that oil prices will likely continue to rise in 2023 especially as China is reopening.  The Energy Information Administration (EIA) forecast that Brent Crude oil prices will average USD 95.33 per barrel in 2023.

$Energy Select Sector SPDR Fund(XLE)$  is my tactical play on rising oil prices as it tracks the performance of US Energy Giants.  In just 1 trade, I gain exposure to$Exxon Mobil(XOM)$  , $Chevron(CVX)$  ,$Occidental(OXY)$  and many others.  Exxon Mobil takes the top spot at 23%, followed by Chevron at 20% and together with Schlumberger, EOG Resources, ConocoPhillips, Pioneer Natural Resources, Marathon Petroleum, Phillips 65, Valero Energy and Occidental Petroleum are the Top 10 holdings in XLE ETF. 

Total number of holdings are 25.  The expense ratio is a low 0.10%.  Dividends are paid quarterly.  The current dividend yield is 3.7%.

As I have limited funds, XLE gives me the maximum bang for my hard earned dollars.  At the current price of USD 88.13, XLE is heaps cheaper than buying Exxon Mobil at USD 110.12 per share. XLE is diversified and spreads my risk instead of focusing on single stocks.  It is a Win Win situation for me. 

Russia is the world 's 2nd largest oil exporter after Saudi Arabia and is part of OPEC. With the current ban and price cap on Russian Energy by US and its allies, I believe that $Energy Select Sector SPDR Fund(XLE)$  will continue to rise in the short to mid term.

XLE ETF has jumped 65% in just 1 year while SPY ETF has dropped 19%. 

So that is why I am bullish on XLE ETF.  It is my best performing ETF in 2022.  XLE is my favourite ETF as it keeps on giving.  Not only has it appreciated in value, XLE pays great dividends which is a wonderful source of passive income.

@Daily_Discussion  @MillionaireTiger  @TigerStars  @CaptainTiger