Big Number
$12.1 billion. That was Chevron’s reported net income in its latest quarter, far above the $2.5 billion it reported in the same period last year. The figure was driven by increased production volumes and the Iran war, which sent commodity prices higher.
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Tangent
Energy firm Phillips 66 said in an earnings call Wednesday it became the third-largest buyer of Venezuelan crude oil, benefiting from maritime trading exemptions doled out by the Trump administration. Phillips 66 was excluded from President Donald Trump’s scrutiny of oil giants this week, as he has blasted Chevron and Exxon for “making too much money” amid the Iran war.
Key Background
Brent crude, one of the global pricing benchmarks for crude oil, averaged $81 per barrel in the first quarter and surged to an average of $92 per barrel as fears surged around the Iran war. Prices for the oil are up 33% since the start of the year, when the cost for a barrel was about $60. Chevron’s net short position in commodity derivatives means the company profits when oil prices fall. So, as Brent crude surged to well above the $100 mark in March and April, the company eventually benefited from a drop down to about $73 that came in the nick of time for its earnings window. Trump’s anger with Chevron and Exxon’s profits come as gas prices remain stubbornly high despite the recent slump in oil prices, with the president threatening to have the companies “give some of that back to the public,” though Trump did not elaborate on how that could be done.
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Further Reading
Phillips 66 Says It’s The Third-Largest Buyer Of Venezuelan Crude As Trump Blasts Exxon And Chevron (Forbes)
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