2017: Making American Crude Again

http://trendmacro.com/system/files/reports/20161229TrendMacroWarren-JH.pdf
Donald L. Luskin
Michael Warren
Thursday, December 29, 2016
Higher prices, deregulation, infrastructure – and tariffs – make US frackers takeover targets.
Strategic view: 

Crude is going to miss our year-end target of $65, but it has been among the very best-performing investible assets in 2016 – up more than 50% on the year and more than 100% since we called the bottom in January. With a looming mismatch of demand over supply and new OPEC cuts designed to reduce stockpiles, $65 is easily attainable in 2017-Q1. Higher prices, the Trump administration’s focus on deregulation and infrastructure, and possibly tax changes that would disfavor imported oil and favor exports, all point to the US integrated majors looking at frackers as takeover targets. ExxonMobil is especially in need of more domestic production.

Author Override: 
Michael Warren and Donald Luskin