The Market, Energy, And Political Page, Part 3, T+1 -- Wednesday, November 7, 2018

Staggering: for those who may have missed it, Oasis is now modeling 1.5 million boe EUR type curves in the Bakken. Link here. It's likely CLR is doing the same thing, but I only recall 1.2 million boe EUR type curves - although they may be "bo" curves, and their graphics do show their wells exceeding the 1.2 million curve (but then, same Oasis; their graphs show wells exceeding the 1.5 million boe EUR curve). Again. I don't recall "boe" vs "bo" for CLR. For Oasis, they were using "boe" EUR curves.

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The market:

• Dow (irrelevant) futures: up 232 points
• WTI: up 1%; trading at $62.86

Comment: there's been a lot of hand-wringing regarding WTI trending towards $60. In fact, the recent high was around $70 and in the big scheme of things, there's not a lot of difference between $70 and $62, especially when one considers the production gains operators are making with fewer rigs, decreased costs. Throw in a bit of hedging by some of the operators and things appear fairly rose. As mentioned earlier, a credible floor trade yesterday suggest WTI's bottom was in. If so, clear sailing from here on out.

112: wow, I almost forgot. Perhaps the biggest US energy story overnight -- in Colorado, voters rejected Proposition 112. It looks like the vote was about 60% of voters supporting the state's oil industry; 40% thought oil companies should leave Denver.

Politics: a reader wrote to me regarding the election -- my not-ready-for-prime-time reply with minimal editing:

I think everything turned out just fine.

The US House has become quite irrelevant over time. We'll be inundated with politics for the next two years -- Trump, Pelosi, lawsuits, Mueller, but I'm hearing that Pelosi doesn't want to actually move forward on impeachment. If not impeachment, no action, and then it's just political talk.

But behind the scenes, Congress is going to want to spend huge amounts of money on infrastructure -- and no one cares about deficit spending any more -- good, bad, or indifferent -- and on top of that Congress will push for a huge middle class tax cut going into mid-terms; US Senate will "moderate" the huge tax cut but it will move the needle in the right direction -- cutting taxes.

Overall, I think it could not have worked out better.

I did not watch any television or listen to any news in the last 24 hours regarding the election except for three races: Heitkamp; Cruz; and proposition 112 in Colorado.

Except that we have to listen to Maxine Waters and Nancy Pelosi for the next 18 months, as an investor, I couldn't be happier. I'm waiting to hear from Jamie Dimon and Warren Buffett. My hunch: they are thrilled. For Jamie Dimon, had Elizabeth Warren taken control of the US Senate banking committee -- I don't think he even wants to think about that ....

I could have added one more thing: I happened to catch a talking head on CNBC say the other day that "neither party" can do anything regarding "entitlement reform." Talk of "entitlement reform" on CNBC? Give me a break. Entitlement reform. What a joke. I almost fell off my chair when I heard her say that -- first of all, it was a classic example of non sequitur -- and completely off-topic. I haven't heard anyone talk about entitlement reform in ages; have you? The only talk of "reform" I have heard has come from Bernie Sanders and he wants what the millennials and the "i" generations want: free college tuition; free health care for all.