Crude oil prices rocket back from the coronavirus lockdown fear trade. Prices came back on reports that Russia will alert energy companies to extend oil production cuts for three months and a sizzling U.S. manufacturing report that was the best in years, counteracting the doom and gloom over virus reports. Stocks are also getting support on polls tightening stories, giving President Trump a path to victory, which would avoid a devastating increase in the corporate tax rate, sending jobs and companies back overseas. It would also reduce the risk of more rules and regulations on the U.S. oil and gas industry that would mean more layoffs in the oil and gas sector. Biden's tax plan will lead to lower growth and jobs and will prolong the coronavirus lockdown recovery. Higher taxes will also mean less revenue for the Federal government, as we have seen historically with every significant U.S. tax hike. Investment capital would also slow up, and we will see the wealth gap explode even higher as higher taxes will erase recent wage gains.

The big oil turnaround happened after Russia's Energy Minister Alexander Novak said that he was meeting with Russia's oil companies' executives on Monday to discuss an extension of the OPEC+ production cut deal for three months. The market took this seriously because Mr. Novak is usually less open to production cuts. He listens to the Russian oil company executives who want to raise output, not cut. Mr. Novak took a hard line against Saudi Arabia, which led to the oil production war that sent oil prices below zero. He is the main go-between Russian President Vladimir Putin and the Russian oligarchs. He is the good cop bad cop.

Still, Russia has been toeing the line on cuts as Jodi reported that Russian crude oil exports in July fell month-on-month by 873 KBD to its historical low of 4.13 MBD. That compliance and the potential to extend cuts could mean that the European shutdowns might be offset by rising demand in India and China, and the U.S., whose manufacturing sector is on fire.

Reuters reported that U.S. manufacturers saw a widespread increase in activity last month, with the ISM composite purchasing managers' index rising to 59.3 in Oct from 55.4 in Sep, the highest since September 2018 and in the 84th percentile for all months since 1950. There were also were widespread increases in new orders (67.9) and production (63.0) with a more modest improvement in the employment component (53.2). That means that the expansion should continue at least until Biden starts raising their taxes. 

RBOB gasoline saw prices fall below a dollar a gallon for a brief moment after rebounding sharply with crude. Low pump prices should help demand even as more lockdowns in some cities work to offset that.

Natural gas is under attack from a bit of a warmup. Though the break should be a point to put on your winter hedges as U.S. LNG exports will surge to records, and U.S. production will falter. Biden's plan not to allow new fracking on Federal land and eliminate subsidies for U.S. energy will start to revise the U.S. natural gas miracle. The miracle that has helped feed the U.S. economy and that sizzling U.S. manufacturing number.