C.O.B. Tuesday

Today we were honored to host Mayor Lori Blong of Midland. Lori is a proud Midland native and previously served on the Midland City Council and as Mayor Pro Tempore before being elected Mayor in 2022. In addition to her duties as Mayor, Lori is a Founder and Partner of Octane Energy. She began her career as an educator in the Permian Basin and has deep ties to the community. We were thrilled to hear her insights on the Midland energy sector and broader community.

In our discussion, Lori shares data on Midland’s demographics and consistent population growth, highlighting that the city’s largest age groups are 0-10 and 30-40 years old. We touch on the influx of workers and families from across the US and the world, growing demand for retail and lifestyle amenities, and recent commercial and national defense developments at the Midland Air and Space Port, including the development of a high-speed corridor for supersonic and hypersonic testing. Lori shares how Midland is addressing worker shortages through partnerships with local universities, the city’s pro-development attitude, her inspiration to run for Mayor, priorities in improving community education and healthcare, and navigating the complexities of political campaigning. We discuss Lori’s working partnerships with Congressman Pfluger and Senator Sparks to secure federal and state support, major infrastructure and transportation projects in Midland and the Permian Basin, and the critical support that the Permian Strategic Partnership (website linked here) and private investments have provided to bolster infrastructure and community services. We also cover Midland’s long-term water planning, the importance of reinvesting in Midland, the city’s high GDP relative to its population, opportunities to leverage excess natural gas for power generation, the city’s confidence in its economic resilience, and much more. We ended by asking Lori for her vision of Midland in ten years. As you will hear, Lori is incredibly passionate about helping her community and we greatly enjoyed the discussion.

Mike Bradley kicked us off by highlighting that the key word to describe market action right now is "digestion" as Trump begins nominating his Cabinet picks and investors begin to ponder how they might affect future policy. On the crude oil market front, WTI has traded sideways to slightly lower (~$69/bbl) this past week due to a surge in the U.S. dollar which is creating a short-term headwind for dollar denominated commodities. WTI prompt spread has moved into contango, signaling a loosening oil market. OPEC recently lowered its 2025 oil growth assumptions (again) which likely forces them at their December OPEC meeting to delay unwinding current production curtailments until sometime in Q1. On the broader equity market front, the S&P 500 was down a couple percent as markets were oversold prior to the election, jumped by ~4-5% post-election, and are now pulling back as Trump's equity market euphoria looks to be fading. He noted that broader equity markets will be laser focused on NVIDIA’s results after the close on Wednesday, so expect pent-up market volatility as investors are hoping that Blackwell revenues are exceeding expectations and that the AI momentum trade is still intact. On the energy equity front, it was one of the few S&P sectors up last week (~1.5%) and energy investors seem to be very enthusiastic with Trump's picks for the Department of Interior (Doug Burgum) and the Department of Energy (Chris Wright). He ended by noting that a handful of SMR (nuclear equities) rallied 15-20% on expectations that the new Administration would be favorable to this technology. Jeff Tillery added his perspective and questions to the discussion.

We hope you enjoy the conversation with Lori as much as we did. She was fabulous! Thanks to you all!