Hey Steve,
The oil sector continues to be pretty volatile. That said, inflationary pressures are persisting and it's quite possible oil prices remain elevated for some time. Even though we are seeing a drop in demand, we are also seeing supply shrink as well. This is why the overall price of oil has been relatively stable here. Keep in mind we are exiting the 'driving season' as summer comes to a close and winter rolls in. That said, companies like CNQ (which we consider best in class) continue to rake in the cash at these levels. We'd have to see a significant drop in oil prices for them not to be cash-generating machines, but we haven't seen that yet.
In our opinion, XEG is one of the best ETFs in the space. Dan owned it at one point as his source of exposure at one point.
Both these ETFs are close to all-time highs, and many of the oil & gas companies are as well. So I would be cautious here as they could pull back just from a technical perspective. Likewise, so many factors that could negatively impact the price of oil and if that happens, we could see a sharp decline in oil prices. But with the information in front of me today, I don't see a sharp decline. Maybe a slower dip to more reasonable prices like we saw earlier in the year (60-70 range) but that is no reason to avoid the sector. Once again however, just keep in mind if you buy today - many of these companies and ETFs are trading at ATHs, so any pull back in oil prices would certainly lead to short-term dips.
Mat