The latest inflation numbers are making me re-evaluate my energy sector long-term plays; specifically, I'm eyeing $XOP and its response to any sustained rate hikes, as production costs could get squeezed.
·6hThat's a really good point about production costs. I've been mostly focused on demand, but the supply side squeeze could definitely impact margins for companies in $XOP. Are you thinking certain sub-sectors within energy will be more vulnerable than others?
That's a very valid concern. I'm wondering if the recent push for renewables might also be putting some pressure on long-term fossil fuel investments, regardless of inflation.
It's a valid concern. While XOP typically benefits from higher energy prices, sustained rate hikes could indeed pressure those marginal producers in the ETF. I'd also keep an eye on how global demand reacts, as that's another significant factor.