Oil Irony

The time has come

A fact's a fact

It belongs to them

Let's give it back
--Midnight Oil

In hindsight, an 'obvious' trade associated with the incoming administration was getting long things fossil fuel--particularly the big guys. Executive orders have already shut down the Keystone Pipeline project and raised hurdles on domestic production.

Prospects of extended periods of curtailed supply have lit a fire under crude oil and producers with capacity outside the reach of Washington regulators.

Crude prices have nearly doubled, topping $66/barrel on Friday.

Stocks have followed suit, with big oil names such as Chevron (CVX) and Exxon (XOM) marking 52 week highs.

The irony is hard to ignore. The pro-business, anti-regulation Trump administration facilitated a domestic oil production boom that increased supply, increased sector employment, and decreased prices in pursuit of 'energy independence' goals.

Now, the anti-business, pro-regulation Biden administration is shutting that boom down, cutting sector jobs, and driving energy prices higher in pursuit of 'green energy' goals.

It is also handing fossil fuel producers just what they need: better breakeven points.

position in CVX, XOM