Oil is hovering near ~$90 WTI. The US oil rig count is 410.
For the last decade, that combination was a contradiction. It resolved itself inside six months as operators chased the price signal, ran rigs to 700-plus, and flooded the market with barrels until the curve broke.
Even if every public E&P announced tomorrow that discipline was over and they were growing at 2018 rates, the barrels do not show up quickly.
Think through the sequence.
A rig has to be uncrated, recertified, crewed up, moved, spudded. DUC inventory is too thin to bridge more than a few months of accelerated completions. Frac crews have to be reassembled and trained. Sand and water logistics have to be contracted. Midstream capacity has to be built out and in some basins expanded. Gas processing has to ramp. Takeaway has to be contracted.
The dynamic in US shale has changed, so don’t expect a big supply response to higher prices, as companies are focused on returning capital to shareholders. Even after the Strait reopens, oil prices will likely remain higher for longer.
Some will likely dismiss Mr. Friedland’s bullish comments on copper and suggest he is biased because he is in the copper business.
When I consider our new Mayor Mamdani and his legions of committed followers, the thought I can’t get away from is “How is it possible to be this ignorant?”
Right now here in New York, Mamdani is moving forward with his plan to open a chain of government-owned grocery stores, at least one for each of our five boroughs. The underlying concept is that groceries have become too expensive for low income people to buy, undoubtedly due to evil capitalists siphoning off vast profits somewhere in the system. In the latest iteration of his proposal, Mamdani has said that the government stores will sell “basic” products like bread, milk and eggs at “guaranteed cheaper” prices. From the New York Post, April 14:
“When it comes to the products that we will be selling at the city-run grocery stores, there will be an essential basket of goods that will be guaranteed a cheaper price, and cheaper than what they’re being sold at currently,” Mamdani said during a news conference at La Marqueta in Harlem.
Sure, they will. I like that the author included the story about Boris Yeltsin visiting Houston and being amazed by what he saw at an American grocery store.
In his autobiography “Against the Grain” published the next year (1990), Yeltsin wrote:
“When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, for the first time I felt quite frankly sick with despair for the Soviet people. . . . That such a potentially super-rich country as ours has been brought to a state of such poverty! It is terrible to think of it.”
And people want to argue with me when I say the US is in terminal decline. These people (Mamdani and his ilk) are the future, unfortunately. Plan accordingly.
Index investing was for a long time synonymous with tracking the S&P 500, “America’s index.” But as the golden anniversary of index fund investing approaches, the strategy is widely available across and within asset classes. Its appeal is evident: Indexing is an easy-to-understand, cost-effective strategy that can offer diversification, tax efficiency, and consistent performance relative to the results of the market.
I am not opposed to index investing. It is likely the best way for the average person to invest in the stock market and participate in what I call the “ascension of man” and the consummation of wealth creation attached to that trend.
I just think I can do better as an individual investor. Since the start of the AIA Newsletter, we have been able to handily beat the S&P Index. Research shows that most investors and fund managers can't, so index investing is the best bet for them.
Brazil added 2 billion barrels in new oil reserves in 2025 alone (more than it produced all year).
It is replacing reserves faster than it depletes them.
Brazil is on track to become a top 5 oil producer in the world by 2030…
The cleanest grid of any major oil nation...
The fastest-growing reserve base in the Western Hemisphere…
The world prices it like a risk.
That is the opportunity.
New follow on Twitter: Drew Crawford
He writes a lot about Brazil and its potential. Worth following as I have learned a lot about Brazil that I did not realize before reading his posts.
Long story short, I am bullish.
That’s it for this week. Stay safe out there!
John Polomny
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