Chaos in Energy Markets Boosts Big Oil Earnings

The U.S. is the world's largest oil producer. So why can events halfway around the world raise the price you pay at the pump? In Just the Facts, USAFax founder, Steve Ballmer, uses government data to break down questions like this, without spin or guesswork. From oil prices to the economy, health care, immigration, and more, get clear answers grounded in the numbers. Watch just the facts at USAFax.org slash just the facts. That's USAFacts.org slash just the facts. A chaotic quarter for energy markets helped U.S. oil companies log eye-popping earnings. Where the crisis has moved now is in fuel. So we're talking about the big three fuels, jet fuel, diesel, and gasoline. Plus, California filed a lawsuit to block the Paramount Warner Brothers merger. Gavin Newsom is concerned about it. and why perfectly edible lettuce is rotting in the fields. It's Friday, July 31st. I'm Alex O'Sullough for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

For Exxon and for Chevron, what that means is the refining margins on making those fuels. They're essentially at record levels. So it's never been more profitable to make those fuels. They're pumping out as much as they can. And yet we're still draining inventories of oil and fuels. I want to shift to talk about Venezuela a little bit. Chevron is the only active U.S. oil producer in the country, and the company has boosted oil production 15% over the past six months to about 280,000 barrels a day there. But that's not really living up to what the Trump administration was pushing a lot of these oil majors to do earlier this year to start or restart operations in the country. A big part of the holdup is that there's this long history of... Dealing with the Venezuelan government, in Venezuela, they have really high taxes and royalty structures. They've had... tough regulations. They really needed to overhaul their hydrocarbon law, which they've done by the oil industry believes that there's still fixes that need to be made. Chevron CEO Mike Worth on the call today said that they're in negotiations with Venezuela to try to improve fiscal terms. But Venezuela historically has just been a really tough place to do business. And going back is a really daunting task. it's hard to justify it to your shareholders when there's opportunities elsewhere. In fact, next door in Guyana, for example. That was WSJ reporter, Colin Eaton. Thank you, Colin. Thank you. In other energy news, BP is putting its UK North Sea business up for sale. It wants to focus on projects that have a higher return. Selling off the business would mean that the British energy major would end production in its home country after more than half a century.

And heads up that we've got a special bonus episode that dropped earlier today. In What's News and Earnings, we look at worries about private credit at the country's biggest private investment firms. That's in your What's News feed now. A big rally in tech stocks to close out the month that left the NASDAQ up 1% with the Dow and S&P not far behind. One thing coming into play here is a relief rally after situational awareness, the hedge fund focused on AI that we told you about yesterday, sold the bulk of its stock holdings. Some fund managers said the news of that transaction removes a big reason for investors to worry about potential for selling by situational. Amazon stock shot up more than 15% after its strong earnings report its biggest climb since 2012. But not all tech stocks got a bump. Apple's shares tanked after its forecast disappointed investors. They closed down more than 7%. That translate to a loss of almost $358 billion in market cap today, the third largest one-day decline in market cap for any U.S. company ever. It was a pretty dramatic month overall for the NASDAQ, which dropped 3.2% in July. Its sharpest decline since March. The Dow ended up slightly in the green, while the S&P was modestly lower on the month. Coming up, how California growers are dealing with wilting demand for lettuce during the cyclospora outbreak. More after the break. I'm Laura Thoreau with Baird Private Wealth Management. You've been doing all the right things. Saving, investing, building toward your goals. Healthcare can be a major expense today and an even greater one over time. Tools like long-term care insurance or a smart health savings account strategy can help protect what you've worked so hard to build. Learn more at baredwealth.com slash WSJ Guidebook.

We've got an update on the migrant crisis going on in the Spanish territory of Sayuta, which we told you about on this morning show. Spanish officials said that at least 57 people died during the rush to enter the territory, mostly by drowning. Of the 50,000 or so people who did make it in, most have now voluntarily crossed back into Morocco, which is just next to Sayuta. Several thousand immigrants are still roaming the streets, and that's worrying residents. The incident raises questions, like who organized such a sudden and massive crossing, especially if it wasn't so that the migrants could claim asylum in Spain. Several analysts said it looked like it was orchestrated by the Moroccan government and was less about immigration than regional politics. Moroccan officials didn't immediately respond to requests for comment. We're exclusively reporting that California Governor Gavin Newsom has expressed concerns about the state's lawsuit that seeks to block Paramount's acquisition of Warner Brothers Discovery. The journal has learned that Gavin Newsom has told people involved that he's worried that if the deal is blocked, it could harm jobs in Hollywood. Gavin Newsom's office has encouraged Attorney General Rob Bonta to find a resolution out of court. However, Gavin Newsom doesn't have a role in the litigation and he doesn't have authority over the state attorney general's actions. Representatives for Gavin Newsom. Gavin Newsom and Banta declined to comment. The outbreak of the cyclospora parasite has been hurting sales at some restaurants like Taco Bell, but it's also affecting what people buy at the grocery store. For example, data from Nielsen IQ shows that heads and bags of lettuce were down 8.7% in the four weeks through July 18th compared with last year. That's leaving the farmers who grow that lettuce with some tough choices. The journal's Amira McKee has been talking to those farmers. Amira, so fewer shoppers to buy lettuce is translating to fewer grocery stores. buying it, right? What does that mean for farmers? These growers who are based mostly in Salinas Valley, California, they've seen cutbacks from restaurants, food distributors, and grocery stores. And these lettuce producers, as one told me, Larry Cox, that across his company, Coastline products, different produce items, sales were down 20 to 30%. Cox said, the only thing worse than losing 100% of your... growing costs is losing a penny more. So because they can't afford to pick and store lettuce, lettuce has a short shelf life, and so you can't really hold on to it. So instead, the best choice for them is to plow over their fields, which means that they chop up the harvest-ready lettuce and till it back into the ground. What is worrying consumers here? I mean, have health officials said that domestically grown lettuce is contaminated? There's an incredible amount of confusion among consumers. To be clear, there are no public health officials or evidence to attest that domestic grown lettuce is linked to cyclospora. Americans have been cutting back on their consumption and purchase of fresh produce and lettuce, but there's really no evidence suggests that produce should be cut out altogether. What about farmers' markets? Those seem to be getting more popular. Could that help these growers make up for some sales not coming from stores and restaurants?

It really does seem like American consumers have become more interested in farmers markets across the country. Different operators I spoke to described an increase in foot traffic from folks who want to have a smaller sort of supply chain attached to the fresh produce that they're eating right now. But when it comes to the larger industry of lettuce, farmers markets represent a very small portion of farmers. And so most of the industry sells to... grocery stores, restaurants, food distributors, the kind of scale that they'd be able to sell at a farmer's market just wouldn't be able to make up for those losses from decrease in demand. That was the Wall Street Journal's, Amira McKee. Thanks, Amira. Thanks, Alex. And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up, What's News and Markets. Then on Sunday, we'll be discussing how investors already have access to private companies like Anthropic if they hold big tech stock. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Anthony Bansy with supervising producer Tali Arbell. Michael Laval wrote our theme music. Isha El-Muslim is our development producer. Chris Zinsley is our deputy editor. And I'm Alex Osala. Have great weekend. and thanks for listening. If your organization isn't managing, then it's likely scattered all over the place. Oh, for three days have I ridden to bring thee warning. The records thy great AI machine requires are strewn across five kingdoms. Yeah. The Everpure data management platform unifies data so you can always find it. No messenger needed. No more running around? Get out of the data dark ages with Everpure, a new era in data management.