The Daily Dose; DUCs are a thing again. Oh, and there’s some kind of political race in the US.

-A President Biden might not be as bad as drillers think.

-US rig counts rise for the eighth straight week.

The stars aligned for a down day for commodities on Friday, with the pandemic, a divisive US political climate, higher rig counts and low unemployment blowing hard in the face of crude oil prices. We still don’t know who won the U.S. presidential election, though it appears former Vice President Joe Biden will be the next commander in chief. Without the expected Blue Wave, we would expect a Biden administration to have a tough time passing the legislation that’s spooked some in the financial markets. Elsewhere, it seems like US drillers may get doing more with less, putting workers on the line to deal with those DUCs.

Running hot for most of the week, Brent is on pace to post a 5% gain on the week, in line with The GERM Report’s estimate from Monday. On the day, however, the trend was downward. The price for Brent crude oil was down 3.4% as of 2:19 ET to trade at $39.52.

Pennsylvania could deliver for Biden if the trend continues throughout Friday. The oil and gas industry fretted over a possible Biden win given his proposal to limit drilling on federal lands. Most of the drilling activity on US territory takes place on public land, though states such as New Mexico could be on the losing end with its strong federal acreage. But his policies might not be as aggressive as some feared. Democrats will hold a majority in the US House of Representatives, but their margin is slipping with Republican challengers winning back some seats. The Republican Party, meanwhile, will remain in control of the Senate. That will make it tough for a President Biden to deliver on some of his sweeping overhauls. That said, a President Biden would almost certainly rejoin the Paris climate accord and ease back on sanctions on oil producers Iran and Venezuela.

Rig counts in Venezuela remain at zero. For the United States, Friday’s rig count from Baker Hughes showed the eighth straight week of gains, increasing by four from the previous week. That’s far below pre-pandemic levels, but the slow, but steady increases suggests US drillers are learning to do more with less. Drilled but uncompleted wells as of September were at 7,600, compared with 8,200 during the same time last year. DUCs, as the name indicated, still need to be fracked before the can start to produce oil or gas, so as the numbers decrease, we should expect oil and gas output in the United States to increase, adding more to any future supply-side strains. Apache Corp. CEO John Christmann said during a Thursday call said it was putting more crews to work clearing out the backlog of DUCs.

“We are now seeing very compelling service costs in the Permian Basin,” he said.

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