Trump's 'Drill Baby Drill' Plan Just Backfired—Oil Stocks Haven't Been This Cheap In Years

Core Insights - The energy sector, which was expected to thrive under President Trump's "Drill Baby Drill" policy, is currently underperforming, with oil stocks declining and crude prices falling significantly [1][2] - Clean energy investments are gaining traction, with the Invesco Roundhill Clean Energy ETF up 67% this year, indicating a shift in investor sentiment away from fossil fuels [5][6] Energy Sector Performance - The Energy Select Sector SPDR Fund (NYSE:XLE) is flat in 2025, making it the worst-performing sector in the S&P 500 [2] - Energy stocks are trading at levels not seen since January 2022, with the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) down over 7% year-to-date [3] Clean Energy Trends - Clean energy has outperformed oil equities for seven consecutive months, marking the longest streak since January 2021, with a 130% outperformance since April 2025 [5][6] - The shift towards clean energy is expected to continue, potentially ending a multi-year trend of oil outperformance that began in 2021 [6] Crude Oil Market Conditions - As of October 20, WTI crude is priced at $56 per barrel, down 22% year-to-date and nearing its lowest level since February 2021 [7] - The decline in oil prices is linked to OPEC+'s decision to increase production quotas by 4 million barrels per day over 18 months starting in April 2025 [7][8]