Idle Chatter: Bakken Operators Executing Their Strategy; Saudi Preparing For 2019 IPO -- June 3, 2018

Wells coming off the confidential list this next week have been posted. It appears the wells being released over the weekend will be some huge wells but then next week there are going to be a lot of DUCs.

I have talked before about the large number of DUCs and inactive wells despite the fact that the price of oil is in a nice range for Bakken operators. My hunch is that operators are "managing" their assets based on their strategic plans, and that's why we continue to see so many DUCs despite the nice oil price environment.

So, what is oilprice.com talking about today? They call this "breaking news" but in fact it was reported last week. I think they are just keeping the same headline: "Saudis may hike July oil prices to Asia to more than 4-year high."

Remember, for newbies:

• Brent is set by the market, directly; affected by Saudi Arabia, indirectly.
• WTI is set by the market, directly: affected by Saudi Arabia, indirectly.
• Saudi's OSP ("official selling price") is set by Saudi Arabia, but influenced by the global market.

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Trade

Americans are watching two different movies when it comes to trade. The "mainstream media" calls it a "trade war." Trump supporters would see this as a historic turn regarding trade negotiations: previously, America, a single county would negotiate trade deals with multiple countries which had formed a "bloc" (like the WTO, the EU, NAFTA, etc). Now, Trump wants bilateral negotiations: one-on-one with Mexico. One-on-one with Canada. One-on-one with the EU. One-on-one with China. In a fight would you prefer to take on a gang of seven by yourself, or would you prefer to take on each individual, one at a time? This is not rocket science. [Yes, I know the EU is a bloc of nations, and one might say my argument falls apart. That's fine. On the other hand, certain tariffs might hurt Germany more than France. But my argument may not hold water. That's fine.]

Later: just after posting the above note, I went over to CNBC to see what was being posted (see screenshot below), and right on cue, validating exactly what I just posted, the market is watching the same "trade" movie that I'm watching. In fact, the market likes the idea of the US negotiating:

• mano a mano; 
• from a position of strength; and,
• without bowing

One-on-one, there is not one country that wants to go tit-for-tat with the US on raising tariffs. They will all negotiate. Which is good. Yahoo!Finance validates Trump's argument:

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The Mideast

Jordan: I've been wondering when Jordan would start imploding.

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Politics

Last night ABC Evening News reported that the contents of some letter from Trump's legal team had leaked. I don't recall the specifics. I believe the letter was from last January, 2018. That story was either the third story or the fourth story to lead ABC Evening News last night. The first two stories had to do with trivial events, one-offs, which I have already forgotten. The ABC report on the leaked contents of the letter:

• lasted less then 60 seconds
• showed a taped comment from Rudy Giuliani, "Trump's lawyer"
• had no discussion with Mueller's team or with any "never-Trumper"
• no additional discussion of any sort

What did that tell me? This is what the one-minute segment told me: ABC News knows that Americans are tired of the Mueller witch hunt. When that story comes on network news and lasts long enough for Americans to find their remote control and switch stations, folks will do just that: switch stations. I was amazed how short this segment was. I asked my wife what that was all about. Apparently Rudy Giuliani was going to be on the Sunday morning "news" shows; if so, this was simply a subliminal tease/advertisement for ABC News on Sunday morning.

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The Sports Page

Horse racing: don't forget. Triple Crown. Belmont. This weekend, June 9. Saturday. 6:36 p.m. EDT. I'll be traveling. I'll miss it.

Swimming: Katie Ledecky on cover of Swimming World's June 2018 cover.

NBA championship: for folks like me, the only two games worth watching: a) game 4 if there's a possibility of a sweep (we'll know later tonight); or, b) game 7 if it goes that far.