Chevron Corp. – ReportWire

Wells Fargo CEO talks up reasons to love the stock — plus, what’s behind the market drop

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Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Market pressure : The major stock benchmarks were moving lower Wednesday, with the Dow getting the worst of it again. Adding pressure on equities, bond yields moved higher following a poor auction of $44 billion worth of 7-year Treasury notes. Nvidia was bucking the overall market decline, but its modest gain was much cooler than the incredible march higher over the past three sessions after last week’s earnings. American Airlines shares sank roughly 15% after a company sales strategy backfired and the carrier cut growth guidance. Sector watch : All of the S & P 500 sectors were under pressure Wednesday, led by energy and utilities. Tech has been flirting with positive territory as Nvidia, which opened lower, reversed to the upside. Fellow Club names Apple and Microsoft were also in the green. Combined, the three account for nearly 49% of the tech sector index. Apple and Nvidia, our two “own, don’t trade” stocks were also the top performers among the entire 33 stock Club portfolio. Deal movers : ConocoPhillips has agreed to buy Marathon Oil in a $17 billion all-stock transaction. Marathon shares rose about 7.5%, while Conoco stock fell roughly 4%. Additionally, Hess shareholders approved the company’s pending merger with Chevron . And, Merck has reached a deal to acquire privately held Eyebiotech for $1.3 billion in cash. Banking news : Here’s a dispatch from our Investing Club reporter Morgan Chittum about what Wells Fargo CEO Charlie Scharf said Wednesday at Bernstein’s 40th annual Strategic Decisions Conference: Scharf said Wells Fargo has been focusing on investment banking in a “very, very targeted way.” There were several mentions of the bank’s quiet hiring spree to beef up its Corporate and Investment Banking (CIB) division, which we reported on last week . Building out lucrative underwriting and advisory fee capabilities is “staring us in the face,” he added, as long-dormant IPO and M & A activity have started to perk up. Expanding Wells Fargo’s Wealth Management franchise, another fee-based revenue stream is “one of the bigger opportunities” ahead, Scharf said. The bank has around 12,000 advisors and is better positioned than in years past, the CEO added. We have been encouraged by Wells Fargo’s push to boost fees business lines. Scharf said Wells Fargo remains focused on efficiency. The bank has cut staff to 225,000 from 275,000. “The conversation around efficiency is less [about] saving money and it’s more about how do we run a better company,” he added. When the Federal Reserve at some point removes its asset cap on Wells Fargo, Scharf said corporate lending and trading will be areas of growth for the bank. He said he dialed back those areas to stay under the Fed’s $1.95 trillion limit. “When you turn a consumer away, they’ll remember that forever,” Scharf said. Businesses understand and can be won back, he added. The CEO believes it’s just a matter of time before the asset cap is lifted and so do we. Scharf said Wells Fargo was able to get a key regulatory penalty removed back in February by stripping away things like certain incentive plans at branches. The so-called consent order was tied to the bank’s 2016 fake accounts scandal that predated Scharf. There are still several other orders outstanding. Quick hits : The FDA granted accelerated approval for Club name Eli Lilly ‘s Retevmo, which is used to treat certain kinds of advanced or metastatic medullary thyroid cancer in children two and older. Twelve years and older was the prior age threshold. Elsewhere, shares of HubSpot were bucking the broader market decline on further speculation that Club name Alphabet is indeed considering an acquisition. CNBC’s David Faber believes that should a deal occur, it would be all-stock. Up next : Salesforce is set to report earnings after Wednesday’s closing bell. AI monetization commentary and what the team has been seeing in terms of cross-selling opportunities will be key watch items. Foot Locker and Best Buy report before the bell Thursday. Costco is out with results Thursday evening. That will do it for Club name earnings, except for Broadcom, which is set to report next month. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.

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May 29, 2024

Warren Buffett’s Berkshire Hathaway made a number of changes in its equity portfolio last quarter

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May 15, 2024

Oil prices little changed as U.S. moves to replenish reserve, Gaza cease-fire still uncertain

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Hundreds of Palestinians, including women and children living in east part of Rafah, migrate to the west part of the Khan Yunis with their few belongings loaded on vehicles following the Israel’s announcement on the evacuation of neighborhoods, in Khan Yunis, Gaza on May 6, 2024.

Ashraf Amra | Anadolu | Getty Images

Crude oil futures were little changed Tuesday as the U.S. moved to replenish the strategic petroleum reserve and a potential cease-fire in Gaza remained uncertain.

The U.S. Energy Department announced a bid for the purchase of 3.3 million barrels to help replenish the strategic petroleum reserve, lifting oil prices earlier in the session before they ultimately closed lower.

The oil market has grown tighter with global inventories declining by 300,000 barrels per day so far this year as OPEC+ has largely adhered to its production cuts, according to a report from the Energy Information Administration.

Here are Tuesday’s closing energy prices:

West Texas Intermediate June contract: $78.38 a barrel, down 10 cents, or 0.13%. Year to date, U.S. crude oil has gained about 9%.
Brent July contract: $83.16 a barrel, down 17 cents, or 0.20%. Year to date, the global benchmark has gained about 8%.
RBOB Gasoline June contract: $2.54 a gallon, down 1.73%. Year to date, gasoline futures have gained about 21%.
Natural Gas June contract: $2.21 per thousand cubic feet, up 0.55%. Year to date, gas has fallen about 12%.

WTI vs. Brent.

There remains significant uncertainty surrounding developments in the Middle East which could lead to a sharp increase in oil prices, according to the EIA.

Israel Prime Minister Benjamin Netanyahu said Tuesday the cease-fire proposal accepted by Hamas was “meant to sabotage the entry of our forces into Rafah,” according to the Times of Israel. Netanyahu said the cease-fire proposal was “very far from Israel’s vital demands.”

Oil prices have briefly made moves higher on geopolitical risk in the Middle East for months now before pulling back as no major disruption to supplies has occurred. U.S. crude oil and Brent are both down about 7% since April highs when traders bid up prices on fears that Israel and Iran were on the brink of war.

Oil Prices, Energy News and Analysis

Chevron CEO Mike Wirth said prices have remained in a relatively stable band but risk remains to the upside for oil due to the war’s proximity to the Strait of Hormuz — the most important global transit point for crude.

“A lot depends on the course of events here, we’re all hoping for an end to the conflict,” Wirth told CNBC at the Milken Institute’s Global Conference in Los Angeles on Monday.

OPEC+ currently has 4 million bpd of spare capacity that could be deployed to address any short-term disruption in supple, according to the EIA.

An Israeli delegation was due in Cairo to continue cease-fire negotiations “to exhaust the possibility of reaching an agreement under conditions acceptable to Israel,” according a statement from Netanyahu’s office.

A truce in the seven-month war remains elusive, said Tamas Varga, analyst at oil broker PVM. It is unclear whether a cease-fire would halt Houthi militant attacks on shipping in the Red Sea, the most material risk to oil so far, Varga said.

“And it would take a bold investor to bet on it,” Varga told clients in a note Tuesday.

Don’t miss these stories from CNBC PRO:

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May 7, 2024

Red Sea risk to oil 'very real,' prices could change rapidly if supply disrupted, Chevron CEO says

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The crisis in the Red Sea poses serious risks to oil flows and prices could change quickly if tensions lead to a major supply disruption in the Middle East, Chevron CEO Michael Wirth told CNBC on Tuesday.

“It’s a very serious situation and seems to be getting worse,” Wirth said in an interview at the World Economic Forum in Davos, Switzerland.

The Chevron CEO said he was surprised that U.S. crude oil was trading below $73 a barrel because the “risks are very real.”

“So much of the world’s oil flows through that region that were it to be cut off, I think you could see things change very rapidly,” Wirth said.

Chevron has continued transporting crude through the region as the company works closely with the U.S. Navy’s Fifth Fleet, Wirth said. The CEO cautioned that situation is evolving.

“We really have to watch very carefully,” Wirth told CNBC.

Shell suspends Red Sea shipments

The British oil major Shell has suspended shipments through the Red Sea, people familiar with the matter told The Wall Street Journal Tuesday. Shell declined to comment in response to a request from CNBC.

Shell’s decision to halt shipments through the crucial trade chokepoint comes about a month after BP paused transits through the Red Sea. Several major tanker companies, which transport petroleum products such as gasoline as well as crude oil, halted traffic toward the Red Sea on Friday.

Houthi militants, who are based in Yemen and allied with Iran, have repeatedly attacked commercial vessels in the Red Sea in response to Israel’s war in Gaza. The U.S. and Britain have launched airstrikes against Houthi targets in Yemen to secure shipping through the waterway.

The Houthis have continued to launch attacks despite the U.S.-led strikes. The militants on Tuesday launched an antiship ballistic missile that struck a Maltese-flagged bulk carrier in the Red Sea, according to U.S. Central Command. No injuries were reported and the vessel continued to transit the waterway, according to CENTCOM.

Sullivan: Houthis are hijacking the world

U.S. National Security Advisor Jake Sullivan said nations with influence in Iran need to take a stronger stand to demonstrate the “entire world rejects wholesale the idea that a group like the Houthis can basically hijack the world as they are doing.”

The U.N. Security Council adopted a resolution last week condemning the Houthi attacks “in the strongest possible terms.” Permanent council members China and Russia, which wield veto power, abstained from the vote on the resolution.

“We anticipated that the Houthis would continue to try to hold this critical artery at risk, and we continue to reserve the right to take further action, but this needs to be an all hands on deck effort,” Sullivan said during an interview in Davos on Tuesday.

Oil market and geopolitical analysts say that the biggest risk to energy supplies would come if Middle East tensions erupt into a regional conflict that disrupts crude oil flows out of the Strait of Hormuz.

Some 7 million barrels of crude oil and products transit the Red Sea daily, compared to 18 million barrels that transit the Strait of Hormuz, according to data from the trade analytics firm Kpler.

Goldman Sachs has warned that a prolonged disruption in the Strait of Hormuz could double oil prices, though the investment bank views that scenario as unlikely.

Wirth said Chevron had two ships attacked by the Iranian Navy last year, one of which was hijacked by commandos and taken to an Iranian port and the other took fire for four hours until the U.S. Navy intervened.

Iran seized an oil tanker last week in the Gulf of Oman. The Marshall Islands-flagged tanker St. Nikolas was previously involved in a dispute between the U.S. and Iran over sanctioned crude.

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January 16, 2024

Top money managers pick the stocks they like for 2024 that aren't the Magnificent Seven

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January 11, 2024

These stocks are overbought and could be due for a pullback

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November 24, 2023

Oil and gas industry needs to let go of carbon capture as solution to climate change, IEA says

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The Gorgon liquefied natural gas (LNG) and carbon capture and storage (CCS) facility, operated by Chevron Corp., on Barrow Island, Australia, on Monday, July 24, 2023.

Bloomberg | Bloomberg | Getty Images

The oil and gas industry needs to let go of the “illusion” that carbon capture technology is a solution to climate change and invest more in clean energy, the head of the International Energy Agency said Thursday.

“The industry needs to commit to genuinely helping the world meet its energy needs and climate goals – which means letting go of the illusion that implausibly large amounts of carbon capture are the solution,” IEA Executive Director Fatih Birol said in a statement ahead of the United Nations Climate Change Conference in Dubai next week.

The technology captures carbon dioxide from industrial operations before emissions enter the atmosphere and stores it underground.

Oil and gas companies face a moment of truth over their role in the clean energy transition, Birol wrote in a an IEA report reviewing the industry’s role in transitioning to an economy with net zero carbon emissions by 2050.

Just 1% of global investment in clean energy has come from oil and gas companies, according to Birol. The industry needs to face the “uncomfortable truth” that a successful clean energy transition will require scaling back oil and gas operations, not expanding them, the IEA chief wrote.

“So while all oil and gas producers needs to reduce emissions from their own operations, including methane leaks and flaring, our call to action is much wider,” Birol wrote.

The industry would need to invest 50% of capital expenditures in clean energy projects by 2030 to meet the goal of limiting climate change to 1.5 degrees Celsius, according to the IEA report. About 2.5% of the industry’s capital spending went toward clean energy in 2022.

One of the major pitfalls in the energy transition is excessive reliance on carbon capture, according to the report. Carbon capture is essential for achieving net zero emissions in some sectors, but it should not be used as a way to retain the status quo, according to the IEA.

An “inconceivable” 32 billion tons of carbon would need to be captured for utilization or storage by 2050 to limit climate change to 1.5 degrees Celsius under current projections for oil and gas consumption, according to the IEA.

The necessary technology would require 26,000 terawatt hours of electricity to operate in 2050, more than total global demand in 2022, according to the IEA.

It would also require $3.5 trillion in annual investment from today through mid-century, which equivalent to the entire oil and gas industry’s annual revenue in recent years, according to the report.

U.S. oil major such as Exxon Mobil and Chevron are investing billions in carbon capture technology and hydrogen, while European majors Shell and BP have focused more on renewables such as solar and wind.

Exxon and Chevron are also doubling down on fossil fuels through mega deals. Exxon is buying Pioneer Resources for nearly $60 billion, while Chevron is purchasing Hess for $53 billion.

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November 23, 2023

Warren Buffett’s Berkshire trimming holdings, keeping new stock secret

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November 14, 2023

Chevron and Exxon’s latest buys could usher in a new era of oil megamergers

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Marathon Petroleum’s oil refinery in Anacortes, Washington.

David Ryder | Reuters

Energy heavyweights Chevron and Exxon Mobil announced shiny new acquisitions this month — and some industry watchers say it could be the start of more multibillion megadeals to come.

Chevron on Monday said it’s buying Hess for $53 billion in stock, allowing Chevron to take a 30% stake in Guyana’s Stabroek Block — estimated to hold some 11 billion barrels of oil.

The announcement comes just weeks after Exxon Mobil announced its purchase of shale rival Pioneer Natural Resources for $59.5 billion in an all-stock deal. While this marks Exxon’s largest deal since its acquisition of Mobil, the merger would also double the oil giant’s production volume in the largest U.S. oilfield, the Permian Basin.

“The big-money acquisition of Hess by Chevron accelerates the trend of consolidation and big-money deals,” energy consultancy Rystad Energy said in a note.

Although Chevron’s acquisition is the continuation of a story started by the Exxon-Pioneer deal, its motivation and impact is slightly different, the note stated.

Exxon is zoning in on its core operations in the Permian basin, while Chevron has decided to expand into where it does not yet have existing assets: Guyana and the Bakken shale.

These megadeals are just a prelude to this large investment wave I expect in coming years.

Bob McNally

President of Rapidan Energy Group

Kpler’s economist Reid I’Anson said the Exxon-Pioneer deal is “likely a bit less risky” compared to the Chevron-Hess deal.

Exxon will see more immediate returns and Pioneer alone would add 711,000 barrels per day, he said comparing it to just 386,000 barrels per day from Hess.

“However, the Chevron acquisition likely has more upside given the future production growth potential out of Guyana,” he noted.

That said, both Exxon and Chevron’s megadeals are indicative of a larger, overarching ambition.

The two oil giants plan to continue pumping investments into fossil fuels as demand for crude remains strong, especially amid tightening global supplies fueled by years of chronic underinvestment.

Consolidation has been a focus in the North American shale space in the past year, especially in the Permian basin where larger exploration and production (E&Ps) have “swallowed up” smaller operations in the bid to bolster drilling inventories and boost free cash flow, Rystad’s senior shale analyst Matthew Bernstein told CNBC.

Silhouette of Permian Basin pumpjacks taken at dusk, north of Midland, Texas, U.S. in late 2019.

Richard Eden | via Getty Images

The upstream segment of the oil and gas industry refers to the exploration for oil or gas deposits, as well as extraction and production of those materials.

The Permian basin is a shale patch that sits between Texas and Mexico, which saw a slew of deals this year.

“These megadeals are just a prelude to this large investment wave I expect in coming years,” Bob McNally, president of Rapidan Energy Group, told CNBC via email. With Exxon deepening its presence in the U.S. shale sector, and Chevron’s eyes on Guyana, the two deals will instill more confidence in the wider oil industry to overcome any hesitation and invest in oil and gas, McNally continued.

“These deals signify the shift from a multi-year bust phase in oil that began in 2014 to a multi-year boom phase that should last well through this decade,” he forecasts.

No peak demand for oil just yet?

The deals by the two largest publicly traded major oil companies appear to confirm that crude oil demand will remain strong over the long term, said Andrew Woods, Mintec’s industrial analyst.

Dan Pickering, founder of Pickering Energy Partners, echoed similar sentiments, saying that both energy behemoths believe oil demand has not yet peaked.

On Tuesday, the International Energy Agency reported that demand for oil, coal and natural gas is set to peak before the end of the decade, on the back of rising clean energy technologies.

Oil prices year-to-date

A peak in oil demand refers to the point in time when the highest level of global crude demand is reached, in which a permanent decline would then follow. This would theoretically decrease the need for investments in crude oil projects as other energy sources take precedence.

“We are clearly entering into a period of consolidation,” Pickering said, adding it is not just megadeals that the oil industry will be seeing, but also many “merger-of-equals” amongst small or mid-sized companies with market capitalizations between $3 billion to $30 billion.

Pickering said investors currently do not want volume growth, but prefer capital discipline — a shift from focusing on production volume to a focus on financial value.

“Instead of drilling to grow production or cash flow, companies are now combining to gain scale, lower costs and grow earnings and cash flow without meaningful incremental volumes,” he said.

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October 27, 2023

Stocks making the biggest moves midday: Intel, Chipotle, Juniper Networks and more

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October 27, 2023

CNBC Daily Open: Oil deals ahead of Big Tech earnings

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Omar Marques | Lightrocket | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Markets attempt comeback
The Nasdaq Composite snapped a four-day losing streak on Monday as Treasury yields retreated from their highs. Investors awaited the release of corporate earnings from tech giants including Alphabet and Microsoft. Asia-Pacific markets were higher in midday trading as investors assessed private surveys of business activity from Japan and Australia.

Another oil mega-merger
Chevron on Monday said it agreed to buy Hess for $53 billion in stock. It’s the second proposed mega merger among the biggest U.S. oil players after Exxon Mobil bid $60 billion for Pioneer Natural Resources earlier this month. The proposed deal also raises the competition between Chevron and Exxon to develop drilling in nascent producer Guyana.

Nvidia’s latest blow to Intel
Nvidia is working on building personal computer chips which would use technology from Arm Holdings, Reuters reported on Monday. The plans mean the chipmaker would challenge Intel in its longtime stronghold of personal computers. Advanced Micro Devices also reportedly plans to make chips for PCs with Arm technology.

Bitcoin breaches $34,000 to highest since May 2022
The price of bitcoin breached the $34,000 level to hit its highest since May last year, bolstered by positive sentiment about a bitcoin exchange-traded fund. The world’s largest cryptocurrency was trading 4.97% higher at $34,596.40 on Tuesday, according to data from Coin Metrics.

[PRO] Portfolio manager names the new growth stocks
Markets may be facing an “unusual amount” of uncertainty, but there still are very good opportunities right, according to one portfolio manager, who tells CNBC Pro about three new growth areas he likes: obesity drugs, reshoring and artificial intelligence.

The bottom line

Markets had an eventful start to the week, with just enough optimism ahead of Big Tech earnings reports to help the Nasdaq close higher for the first time in five sessions. Deal making was also at play on Monday as Chevron bet big on buying Hess to compete with larger rival Exxon Mobil.

Stocks have been feeling the pressure from multiyear highs in Treasury yields and worries about how that stands to affect the American economy. Some analysts think the benchmark 10-year yield could still have further room to run.

The rapid rise in yields “should accelerate an already weakening economic picture that is masked by higher rates,” said Canaccord Genuity chief market strategist Tony Dwyer.

Microsoft, which is slated to report earnings after the close Tuesday, is seen by UBS as a potential hedge against a recession next year. Unlike more focused software companies, Microsoft “has full geographic coverage across all industry verticals,” UBS analyst Karl Keirstead said, and that makes Microsoft less susceptible to downturns in any one sector or region. Alphabet is also set to report quarterly results Tuesday afternoon.

Wall Street analysts also made fresh calls on what is quickly becoming one of this year’s hottest segments in pharmaceuticals – weight loss drugs.

Most analysts predict the sales of weight loss drugs such as Wegovy and Mounjaro could easily exceed $100 billion. Citi most recently raised its sales estimates for such drugs to $71 billion by 2035, up from its prior estimate of $55 billion. Still, that’s conservative compared to Guggenheim’s expectations of $150 billion to $200 billion in sales.

Europe’s most valuable publicly listed company, Novo Nordisk makes Wegovy, which is also sold under the brand name Ozempic. U.S. drugmaker Eli Lilly makes Mounjaro.

Investors were also closely watching the crypto industry as bitcoin touched its highest level in over a year on Tuesday, on hopes of a bitcoin exchange-traded fund. A bitcoin ETF would give investors a way to gain exposure to bitcoin’s price movements without owning the volatile cryptocurrency directly.

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October 23, 2023

CNBC Daily Open: Oil deals and awaiting tech earnings

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Traders work on the floor of the New York Stock Exchange on April 26, 2023 in New York City.

Michael M. Santiago | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Markets attempt comeback
The Nasdaq Composite snapped a four-day losing streak on Monday as Treasury yields retreated from their highs. Investors awaited the release of corporate earnings from tech giants including Alphabet and Microsoft. Europe’s Stoxx 600 index ended slightly lower amid geopolitical uncertainty and ahead of the European Central Bank’s monetary policy decision later this week.

Another oil mega-merger
Chevron on Monday said it agreed to buy Hess for $53 billion in stock. It’s the second proposed mega merger among the biggest U.S. oil players after Exxon Mobil bid $60 billion for Pioneer Natural Resources earlier this month. The proposed deal also raises the competition between Chevron and Exxon to develop drilling in nascent producer Guyana.

Nvidia’s latest blow to Intel
Nvidia is working on building personal computer chips which would use technology from Arm Holdings, Reuters reported on Monday. The plans mean the chipmaker would challenge Intel in its longtime stronghold of personal computers. Advanced Micro Devices also reportedly plans to make chips for PCs with Arm technology.

Tesla discloses DOJ probes
Tesla disclosed that the U.S. Department of Justice has been investigating, and in some cases issued subpoenas, to Elon Musk’s automaker. In a third-quarter financial filing out Monday, Tesla said the department is looking into its driver assistance systems marketed as Autopilot and Full Self-Driving, or FSD, options; the range of the company’s electric vehicles; as well as “personal benefits, related parties,” and “personnel decisions” at the company.

[PRO] Goldman’s guide to 5% 10-year yield
Bond yields have been surging lately as the Federal Reserve signaled higher rates for longer in its inflation fight. The benchmark 10-year rate briefly topped the key 5% threshold Monday. Investors should focus on stocks with strong balance sheets as these companies tend to be more resilient against high interest rates, according to Goldman Sachs.

The bottom line

Markets had an eventful start to the week, with just enough optimism ahead of Big Tech earnings reports to help the Nasdaq close higher for the first time in five sessions. Deal making was also at play on Monday as Chevron bet big on buying Hess to compete with larger rival Exxon Mobil.

Stocks have been feeling the pressure from multiyear highs in Treasury yields and worries about how that stands to affect the American economy. Some analysts think the benchmark 10-year yield could still have further room to run.

The rapid rise in yields “should accelerate an already weakening economic picture that is masked by higher rates,” said Canaccord Genuity chief market strategist Tony Dwyer.

Microsoft, which is slated to report earnings after the close Tuesday, is seen by UBS as a potential hedge against a recession next year. Unlike more focused software companies, Microsoft “has full geographic coverage across all industry verticals,” UBS analyst Karl Keirstead said, and that makes Microsoft less susceptible to downturns in any one sector or region. Alphabet is also set to report quarterly results Tuesday afternoon.

Wall Street analysts also made fresh calls on what is quickly becoming one of this year’s hottest segments in pharmaceuticals – weight loss drugs.

Most analysts predict the sales of weight loss drugs such as Wegovy and Mounjaro could easily exceed $100 billion. Citi most recently raised its sales estimates for such drugs to $71 billion by 2035, up from its prior estimate of $55 billion. Still, that’s conservative compared to Guggenheim’s expectations of $150 billion to $200 billion in sales.

Europe’s most valuable publicly listed company, Novo Nordisk makes Wegovy, which is also sold under the brand name Ozempic. U.S. drugmaker Eli Lilly makes Mounjaro.

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October 23, 2023

Cramer explains what geopolitical upheaval means for the stock market

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October 23, 2023

5 things to know before the stock market opens Monday

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Here are the most important news items that investors need to start their trading day:

1. Bond yield boost

U.S. stock futures slid Monday morning as the 10-year Treasury note yield again ticked above 5% — a level it hit Thursday for the first time since 2007. Earnings and inflation data will help to shape whether equities bounce back from a down week. The Dow Jones Industrial Average fell 1.6%, the S&P 500 dropped 2.4% and the Nasdaq Composite shed 3.2% last week. A string of major earnings reports are due Tuesday through Thursday. The personal consumption expenditures data out Friday will offer clues about whether the Federal Reserve will hike interest rates again this year. Follow live market updates here.

2. Tech torrent

The tech sector, which has largely driven market gains this year, will headline a busy stretch of earnings this week. Other key reports will come from the transportation and food and beverage spaces. Investors will focus on General Motors and Ford results as executives will answer questions about the effects of the more than month-long United Auto Workers strike. Here are the major reports this week:

3. Aid arrives in Gaza

The first humanitarian aid convoys since the start of the Israel-Hamas war arrived in Gaza over the weekend, and more shipments of food, water and medical supplies are expected Monday. U.S. President Joe Biden spoke to Israeli Prime Minister Benjamin Netanyahu on Sunday, and said there will be a “continued flow” of aid into Gaza. Israel intensified airstrikes on the besieged area in recent days, as it holds off on a potential ground invasion. Leaders around the globe are trying to prevent the conflict from turning into a broader war. Follow live updates on the conflict here.

4. Oil consolidation ramps up

5. More Google scrutiny

Another country is probing Alphabet’s Google for potential anticompetitive practices. Japan’s Fair Trade Commission said it would investigate potential antitrust violations related to Google’s search engine and its apps and platforms. The move in Japan follows scrutiny over allegations of anticompetitive conduct in the European Union and United States. A Google spokesperson told CNBC that Android is an open platform that ensures “users always have a choice to customize their devices to suit their needs, including the way they browse and search the internet, or download apps.”

– CNBC’s Lisa Kailai Han, Ruxandra Iordache, Matt Clinch and Arjun Kharpal contributed to this report.

— Follow broader market action like a pro on CNBC Pro.

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October 23, 2023

Saudi energy minister says oil supply cuts are not about ‘jacking up prices,’ as Brent hovers at $95 a barrel

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Prince Abdulaziz bin Salman at the World Petroleum Congress in Calgary, Canada, on Sept. 18, 2023.

Bloomberg | Bloomberg | Getty Images

Saudi Arabia’s energy minister said Riyadh and Moscow’s decision to extend crude oil supply cuts is not about “jacking up prices,” as Brent futures hover near $95 a barrel and analysts predict further rises into triple digits.

“We can reduce more, or we can increase, that has been a subject that we want to make sure that the messaging is clear, that it’s not about, again, this jacking up prices,” Saudi Energy Minister Prince Abdulaziz bin Salman said Monday at the World Petroleum Congress in Calgary, Alberta.

“It’s about … making the decision at the right time, when we have the data, and when we have the clarity that would make us in much more of a comfort zone to take that decision.”

Some members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are implementing 1.66 million barrels per day of combined voluntary declines — which falls outside of unanimously agreed OPEC+ policies — until the end of 2024. Topping this, Saudi Arabia and Russia announced they will apply respective voluntary declines of 1 million barrels per day of production and 300,000 barrels per day of exports until the end of the year.

Saudi Arabia is the world’s largest seaborne oil exporter and relies on hydrocarbon revenues to support so-called giga-projects designed to diversify its economy.

Shrugging off the inertia of the first half of the year, oil prices have gained ground amid supply cut announcements in recent months, as the market braces for a potential volume deficit in the latter part of 2023. ICE Brent crude futures with November delivery were trading at $95.21 per barrel at 5 p.m. London time Tuesday, up 78 cents per barrel from the Monday close price. Front-month October NYMEX WTI futures were at $92.51 per barrel, up $1.03 per barrel from the Monday settlement. The increases have rallied some analysts around speculation of a short-term return to oil prices at $100 per barrel.

Asked on the possibility of hitting that threshold, Chevron CEO Mike Wirth on Monday admitted oil prices could cross into triple digits in a Bloomberg TV interview.

“Sure looks like it. We’re certainly moving in that direction. The momentum, you know, supply is tightening, inventories are drawing, these things happen, gradually you can see it building. And so I think, you know, the trends would suggest we’re certainly on our way, we’re getting close,” he said, acknowledging an impact on the world economy. “I think the underlying drivers to the economy in the U.S. and frankly globally remain pretty healthy. I think it’s a drag on the economy, but one that thus far, I think the economy has been able to tolerate.”

Energy prices have repeatedly underpinned higher inflation in the months since the war in Ukraine and Europe’s gradual loss of access to sanctioned Russian seaborne oil supplies.

Peak feud

Abdulaziz once more struck out at Paris-based watchdog the International Energy Agency, whose executive director, Fatih Birol, last week said in a Financial Times op-ed that “the IEA was wary of such premature calls, but our latest projections show that the growth of electric vehicles around the world, especially in China, means oil demand is on course to peak before 2030.”

“None of the things that they were warning about has happened. And name me any time that their forecasts were as accurate as one would have hoped for. But, you know, they’ve moved now from being forecasters and assessors of market to one of political advocacy,” Abdulaziz said Monday.

The IEA did not immediately respond to a CNBC request for comment.

Amin Nasser, CEO of Saudi state-controlled oil giant Aramco, likewise on Monday said that the notion of peak oil demand is “wilting under scrutiny,” noting “many shortcomings in the current transition approach that can no longer be ignored” and stressing that carbon capture “can no longer be the bridesmaid of transition.”

The comments come two months ahead of a pivotal session of the United Nations climate change conference, which is set to controversially convene on the territory of major oil producer the United Arab Emirates, starting on Nov. 30.

Climate change positioning has been a key hurdle of the increasingly fraught relationship between Saudi Arabia and the IEA — in a landmark 2021 report, the energy watchdog argued for no investment in new fossil fuel supply projects, if the world is to stave off an incoming climate crisis. Riyadh meanwhile champions a dual approach to decarbonization with simultaneous investment in oil and gas and renewables, in a bid to avoid an energy deficit.

U.S. stance

Higher prices at the pump have historically put pressure on the administration of U.S. President Joe Biden, which in October last year waged an intense war of words over the OPEC+ production strategy that levied accusations of coercion against Riyadh.

But Washington has stayed comparatively silent over the latest OPEC+ reductions, even as Biden mounts his campaign for reelection next year. The U.S. must balance domestic interests against foreign policy objectives to normalize relations between Israel and Saudi Arabia, while Riyadh has increasingly slipped Washington’s influence after resuming ties with Iran in China-brokered diplomacy earlier this year and earning an invitation to the China- and Russia-backed emerging economies group BRICS in August.

In a further blow to the U.S., Saudi Arabia remains tightly bound to Western-sanctioned OPEC+ heavyweight producer Russia. Most recently, the Kremlin said Russian President Vladimir Putin and Saudi Arabia’s Crown Prince Mohammed bin Salman spoke by phone on Sept. 6 and “noted that specific agreements on reducing oil production, combined with voluntary obligations to limit raw materials deliveries, made it possible to stabilize the global energy market.”

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September 19, 2023

Hurricane Idalia and Labor Day could send gas prices and inflation higher | CNN Business

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A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.

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Labor Day — one of the busiest driving holidays in the US — is on the horizon, and so is Hurricane Idalia. That’s potentially bad news for gas prices.

The storm, which is expected to make landfall in Florida as a Category 3 hurricane on Wednesday, could bring 100 mile-per-hour winds and flooding that extends hundreds of miles up the east coast. The impact could take gasoline refinery facilities offline and may limit some Gulf oil production and supplies. Plus, demand for gas is expected to surge as residents of the impacted areas evacuate.

“Idalia… could pose risk to oil and gas output in the US Gulf,” wrote the Nasdaq Advisory Services Energy Team.

The storm is expected to make landfall as drivers nationwide load into their vehicles for the Labor Day weekend, pushing up the demand for gasoline even further.

All together it means the price of oil and gasoline could remain elevated well into the fall.

Generally, summer demand for oil tends to wane in September, but so does supply as refineries shift from summer fuels to “oxygenated” winter fuels, said Louis Navellier of Navellier and Associates. Since the 1990s, the US has required manufacturers to include more oxygen in their gasoline during the colder months to prevent excessive carbon monoxide emissions.

With the storm approaching, that trend may not play out.

What’s happening: Gas prices are already at $3.82 a gallon. That’s the second highest price for this time of year since at least 2004, according to Bespoke Investment Group. (The only time the national average has been higher for this period was last summer, when prices hit $3.85 a gallon).

Geopolitical tensions have been supporting high oil and gas prices for some time. Recently, increased crude oil imports into China, production cuts by Russia and Saudi Arabia and extreme heat set off a late-summer spike in gas prices. And the threat of powerful hurricanes could send them even higher.

Analysts at Citigroup have warned that this hurricane season could seriously impact power supplies.

“Two Category 3 or higher hurricanes landing on US shores could massively disrupt supplies for not weeks but months,” Citigroup analysts wrote in a note last week. In 2005, for example, gas prices surged by 46% between Memorial Day and Labor Day because of the landfall of Hurricane Katrina, according to Bespoke.

What it means: The Federal Reserve and central banks around the world have been fighting to bring down stubbornly high inflation for more than a year. This week we’ll get some highly awaited economic data: The Fed’s preferred inflation gauge, the Personal Consumption Expenditures index, is due out on Thursday. But the task of inflation-busting is a lot more difficult when energy prices are high, and it’s even harder when they’re on the rise.

The PCE price index uses a complicated formula to determine how much weight to give to energy prices each month, but they typically comprise a significant chunk of the headline inflation rate.

“Crude oil price remains elevated, even after the surge at the start of the Russia-Ukraine War,” said Andrew Woods, oil analyst at Mintec, a market intelligence firm. “Energy prices have been a major contributor to persistently high inflation in the US, so the crude oil price will remain a watch-out factor for future inflation.”

High oil and gas prices are one of the largest contributing factors to inflation. That’s bad news for drivers but tends to be great for the energy industry, as oil prices and energy stocks are closely interlinked.

Energy stocks were trading higher on Monday. The S&P 500 energy sector was up around 0.75%. Exxon Mobil (XOM) was 0.85% higher, BP (BP) was up 1.36% and Chevron (CVX) was up 0.75%.

OpenAI, will release a version of its popular ChatGPT tool made specifically for businesses, the company announced on Monday.

OpenAI unveiled the new service, dubbed “ChatGPT Enterprise,” in a company blog post and said it will be available to business clients for purchase immediately.

The new offering, reports my colleague Catherine Thorbecke, promises to provide “enterprise-grade security and privacy” combined with “the most powerful version of ChatGPT yet” for businesses looking to jump on the generative AI bandwagon.

“We believe AI can assist and elevate every aspect of our working lives and make teams more creative and productive,” the blog post said. “Today marks another step towards an AI assistant for work that helps with any task, is customized for your organization, and that protects your company data.”

Fintech startup Block, cosmetics giant Estee Lauder and professional services firm PwC have already signed on as customers.

The highly-anticipated announcement from OpenAI comes as the company says employees from over 80% of Fortune 500 companies have already begun using ChatGPT since it launched publicly late last year, according to its analysis of accounts associated with corporate email domains.

A multitude of leading newsrooms, meanwhile, have recently injected code into their websites that blocks OpenAI’s web crawler, GPTBot, from scanning their platforms for content. CNN’s Reliable Sources has found that CNN, The New York Times, Reuters, Disney, Bloomberg, The Washington Post, The Atlantic, Axios, Insider, ABC News, ESPN, and the Gothamist, among others have taken the step to shield themselves.

American Airlines just got smacked with the largest-ever fine for keeping passengers waiting on the tarmac during multi-hour delays.

The Department of Transportation is levying the $4.1 million fine, “the largest civil penalty that the Department has ever assessed” it said in a statement, for lengthy tarmac delays of 43 flights that impacted more than 5,800 passengers. The flights occurred between 2018 and 2021, reports CNN’s Gregory Wallace.

In the longest of the delays, passengers sat aboard a plane in Texas in August 2020 for six hours and three minutes. The 105-passenger flight had landed after being diverted from the Dallas-Fort Worth International Airport due to severe weather, with the DOT alleging that “American (AAL) lacked sufficient resources to appropriately handle several of these flights once they landed.”

Federal rules set the maximum time that passengers can be held without the opportunity to get off prior to takeoff or after landing, at three hours for domestic flights and four hours for international flights. Current rules also require airlines provide passengers water and a snack.

American told CNN the delays all resulted from “exceptional weather events” and “represent a very small number of the 7.7 million flights during this time period.”

The company also said it has invested in technology to better handle flights in severe weather and reduce the congestion at airports.

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August 29, 2023

Berkshire Hathaway’s operating earnings rise nearly 7%, cash pile approaches $150 billion

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Warren Buffett tours the grounds at the Berkshire Hathaway Annual Shareholders Meeting in Omaha Nebraska.

David A. Grogan | CNBC

Berkshire Hathaway on Saturday reported a solid increase in second-quarter operating earnings, while the cash hoard at Warren Buffett‘s conglomerate swelled to nearly $150 billion.

The Omaha-based giant’s operating earnings — which encompass profits made from the myriad of businesses owned by the company, like insurance, railroads and utilities — totaled $10.043 billion last quarter, 6.6% higher than the figure from the same quarter a year ago.

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Net income totaled $35.91 billion, compared with a $43.62 billion loss during the second quarter last year. The strong results were bolstered by a jump in Berkshire’s insurance underwriting and investment income.

Berkshire reported a near $26 billion unrealized gain from its investments as its gigantic stake in Apple led the market rally in the second quarter. The tech giant soared nearly 18% during the quarter and Berkshire’s bet has ballooned to $177.6 billion.

The “Oracle of Omaha” trimmed his Chevron stake by $1.4 billion to $19.4 billion at the end of June. Shares of Chevron have significantly lagged the broader market this year, down more than 11%. The S&P 500 has rallied almost 17% in 2023.

Cash hoard swells

Berkshire’s massive cash pile grew to $147.377 billion at the end of June, near a record and much higher than the $130.616 billion in the first quarter.

Share repurchase activity slowed down as the conglomerate’s stock climbed back to a record high. The company spent just about $1.4 billion in buybacks during the quarter, bringing the year-to-date total to $5.8 billion.

The conglomerate’s Class A shares hit a new record close of $541,000 on Thursday, exceeding the conglomerate’s previous high of $539,180 reached on March 22, 2022. The stock has gained 13.8% this year.

BRK.A in 2023

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August 5, 2023

Stocks making the biggest moves premarket: Intel, Roku, Procter & Gamble and more

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Signage outside Intel headquarters in Santa Clara, California, on Monday, Jan. 30, 2023.

David Paul Morris | Bloomberg | Getty Images

Check out the companies making headlines before the bell.

Intel — Shares popped 6.7% after the chipmaker posted better-than-expected second-quarter results and a return to profitability after two consecutive losing periods. Intel’s forecast for the third quarter also came in above analyst expectations. The company reported adjusted earnings of 13 cents a share on revenues of $12.95 billion.

Roku — The streaming stock rallied nearly 10% after reporting a narrower-than-expected loss for the second quarter. Roku reported a loss of 76 cents a share and revenues of $847 million. Analysts polled by Refinitiv had anticipated a loss of $1.26 per share and $775 million in revenue.

Biogen — Biogen shares moved slightly lower after the biotechnology company said it’s acquiring Reata Pharmaceuticals for $172.50 per share, in a cash deal valued at about $7.3 billion. Shares of Reata soared more than 51% on the news.

Procter & Gamble — The consumer giant saw shares rise more than 1% in premarket trading after the company reported quarterly earnings and revenue that beat analysts’ expectations. However, P&G released a gloomy outlook for its fiscal 2024 sales that fell short of Wall Street’s estimates.

Exxon Mobil — Shares moved slightly lower after the oil stock posted mixed second-quarter results. The company reported earnings of $1.94 a share, excluding items, that fell short of the $2.01 expected by analysts, per Refinitiv. Revenues came in at $82.91 billion, above the expected $80.19 billion.

Chevron — The oil stock lost nearly 1% even after reporting a beat on the top and bottom lines for the second quarter. Earnings fell from a year ago due to a drop in oil prices.

First Solar – Shares soared 12% after the solar company posted earnings per share of $1.59 on revenue of $811 million for the second quarter. Those results beat Wall Street expectations of 96 cents per share on revenue of $721 million, according to Refinitiv. The company also announced plans to invest up to $1.1 billion to build a fifth manufacturing facility in the United States.

Enphase Energy – Shares of Enphase dropped more than 15% after the company posted second-quarter revenue Thursday of $711 million that fell short of analyst estimates of $722 million, according to Refinitiv. The stock also faced a wave of downgrades Friday morning from Deutsche Bank, Wells Fargo and Roth MKM.

Sweetgreen – Shares of the salad chain slid more than 13% after the company posted weak sales that missed Wall Street expectations in the second quarter and a net loss of $27.3 million, or 24 cents per share. Sweetgreen did say it’s aiming to turn a profit for the first time by 2024.

Ford Motor – The automaker said adoption of electric vehicles is going more slowly than the company forecast and that it expects to lose $4.5 billion on the EV business this year, widening losses from roughly $3 billion a year earlier. Otherwise, Ford posted strong quarterly earnings that beat Wall Street expectations and raised its full-year guidance. Shares were flat in premarket trading.

Juniper Networks — Shares of the technology company fell 8% after Juniper’s third-quarter guidance came in lighter than expected. The company said it expects earnings per share between 49 cents and 59 cents, with revenue between $1.34 billion and $1.44 billion. Analysts had penciled in 62 cents per share and $1.48 billion of revenue. The company’s second-quarter results did come in slightly above expectations.

AstraZeneca — U.S. listed shares of the drugmaker added more than 5% before the bell. The U.K.-based company reported second-quarter earnings of $2.15 per share on $11.42 billion in revenue. That surpassed the EPS of $1.95 expected by analysts polled by Refinitiv on revenues of $11.03 billion. AstraZeneca also said it would buy a portfolio of preclinical rare disease gene therapies from Pfizer for up to $1 billion.

Xpeng — The Chinese electric vehicle stock jumped more than 6% in the premarket. Jefferies upgraded shares to a buy from a hold, citing Xpeng’s joint development plan with Volkswagen

New York Community Bancorp — The regional bank stock rose about 2% before the bell after JPMorgan upgraded New York Community Bancorp to an overweight rating from neutral. The Wall Street firm called the company a “massive market share taker” in its upgrade.

Mondelez International — Mondelez International added 2.7% before the bell on strong second-quarter results. The snack maker on Thursday reported earnings of 76 cents a share, excluding items, on $8.51 billion in revenue. Analysts polled by Refinitiv had estimated EPS of 69 cents and revenues of $8.21 billion.

— CNBC’s Tanaya Macheel, Yun Li and Jesse Pound contributed reporting

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July 28, 2023

Chevron’s Q2 adjusted profit beats estimates on record Permian production; new CFO announced

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Chevron Corp. released a second-quarter performance update that was better than expected on Sunday, ahead of the oil major’s earnings announcement this week.

Adjusted profit of $3.08 a share beat the consensus of $2.97 a share as tracked by FactSet. That is down about 47% from the second quarter last year and down from profit of $3.55 a share in the first quarter of 2023.

The company also announced its chief financial officer, Pierre Breber, is retiring after 35 years at the company. Eimear Bonner, the chief technology officer, will succeed him starting in March 2024.

Chief Executive Mike Wirth thanked Breber for his contributions and welcomed Bonner, a 24-year Chevron veteran, saying she can “build on Chevron’s strong foundation and drive further value for shareholders.”

Chevron
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said it had record quarterly production in the Permian Basin, 11% higher than last year’s second quarter. It produced 772,000 barrels of oil equivalent a day, and added that it is on-track for its full-year guidance. The Permian is a shale basin covering parts of West Texas and southeastern New Mexico.

Quarterly shareholder distributions of $7.2 billion also set a record, Chevron said, including $4.4 billion in share buybacks and $2.8 billion in dividends.

Chevron expects to close the acquisition of shale driller PDC Energy in August.

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July 23, 2023

Oregon county sues oil, gas companies including Exxon, Shell, Chevron for deadly 2021 Pacific Northwest heat dome

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Shanton Alcaraz from the Salvation Army Northwest Division gives bottled water to Eddy Norby who lives in an RV and invites him to their nearby cooling center for food and beverages during a heat wave in Seattle, Washington, U.S., June 27, 2021.

Karen Ducey | Reuters

Multnomah County in Oregon is suing oil and gas companies Exxon Mobil, Shell, Chevron, BP, ConocoPhillips and related organizations for the damages caused by the 2021 Pacific Northwest heat dome. Multnomah County said these and other fossil fuel companies and entities operating in the region are significantly responsible for causing and worsening the deadly heat event.

“The combined historical carbon pollution from the use of Defendants’ fossil fuel products was a substantial factor in causing and exacerbating the heat dome, which smothered the County’s residents for several days,” Multnomah County alleges, according to a written statement released Thursday.

The lawsuit is filed against Anadarko Petroleum (acquired by Occidental Petroleum in 2019), American Petroleum Institute, BP, Chevron, ConocoPhillips, Exxon Mobil, Koch Industries, Marathon Petroleum, McKinsey & Company, Motiva, Occidental Petroleum, Peabody Energy, Shell, Space Age Fuel, Total Specialties USA, Valero Energy and Western States Petroleum Association.

Multnomah County is seeking $50 million in actual damages, $1.5 billion in future damages, and an estimated $50 billion for an abatement fund to “weatherproof” the city, its infrastructure and public health services in preparation for future extreme weather events.

Starting on June 25, 2021, Multnomah County had three consecutive days where the heat reached 108, 112 and 116 degrees Fahrenheit, respectively. Each of those days was about 40 degrees above the regional average and were the hottest days in the County’s recorded history.

The heat event is called a heat dome which is a weather event caused by a high-pressure system that in this case prevented cooler maritime winds to blow and also prevented clouds from forming.

The heat caused the deaths of 69 people, and property damage and was a draw on taxpayer resources, Multnomah County says.

Multiple climate scientists researched the cause of the heat dome and all said that the event was caused by excessive carbon dioxide emissions released by the burning of fossil fuels, the plaintiff says.

“The heat dome that cost so much life and loss was not a natural weather event. It did not just happen because life can be cruel, nor can it be rationalized as simply a mystery of God’s will,” the lawsuit reads. “Rather, the heat dome was a direct and foreseeable consequence of the Defendants’ decision to sell as many fossil fuel products over the last six decades as they could and to lie to the County, the public, and the scientific community about the catastrophic harm that pollution from those products into the Earth’s and the County’s atmosphere would cause.”

Jessica Vega Pederson, the chair of Multnomah County, is seeking to protect the residents of the county she represents.

“This lawsuit is about accountability and fairness, and I believe the people of Multnomah County deserve both. These businesses knew their products were unsafe and harmful, and they lied about it,” Pederson said in a written statement announcing the lawsuit. “They have profited massively from their lies and left the rest of us to suffer the consequences and pay for the damages. We say enough is enough.”

The case is being brought by three law firms with expertise in catastrophic harm litigation: Worthington & Caron PC, Simon Greenstone Panatier PC, and Thomas, Coon, Newton & Frost.

The plaintiffs allege the defendants committed negligence and fraud and created a public nuisance.

Bill Forte from North Sky Communications works on a fiber optic line during a heat wave gripping the Pacific Northwest in Lake Forest Park, Washington, U.S., June 26, 2021.

Karen Ducey | Reuters

“There are no new laws or novel theories being asserted here. We contend that the Defendants broke long-standing ones, and we will prove it to a jury,” Jeffrey Simon, a partner at Simon Greenstone Panatier, said in a statement.

The case is using new and expert climate science, according to Roger Worthington, a partner at Worthington & Caron.

“We will show that the normal use of fossil fuel products over time has imposed massive external, unpriced and untraded social, economic and environmental costs on the County. We will show that they were aware of this price, and instead of fully informing the public, they deceived us. And we will ask a jury to decide if it is fair to hold the polluters accountable for these avoidable and rising costs,” Worthington said in a written statement.

“We are confident that, once we show what the fossil fuel companies knew about global warming and when, and what they did to deny, delay and deceive the public, the jury will not let the fossil fuel companies get away with their reckless misconduct,” Worthington said.

Defendants say a court case won’t help

Exxon says the lawsuit is unproductive.

“Suits like these continue to waste time, resources and do nothing to address climate change,” a spokesperson for Exxon told CNBC. “This action has no impact on our intention to invest billions of dollars to leading the way in a thoughtful energy transition that takes the world to net zero carbon emissions.”

The American Petroleum Institute, an industry trade group for the oil and gas industry, defended its constituents’ work making energy available to consumers and, like Exxon, called the lawsuit unproductive.

“The record of the past two decades demonstrates that the industry has achieved its goal of providing affordable, reliable American energy to U.S. consumers while substantially reducing emissions and our environmental footprint,” Ryan Meyers, senior vice president and general counsel for API, told CNBC in a statement. “This ongoing, coordinated campaign to wage meritless lawsuits against our industry is nothing more than a distraction from important issues and an enormous waste of taxpayer resources. Climate policy is for Congress to debate and decide, not the court system.”

Legal counsel for Chevron called the lawsuit unproductive and unconstitutional.

“Addressing the challenge of global climate change requires a coordinated policy response. These lawsuits are counterproductive distractions from advancing international policy solutions,” Theodore Boutrous, Jr. of Gibson, Dunn and Crutcher, told CNBC in a statement. “The federal Constitution bars these novel, baseless claims that target one industry and group of companies engaged in lawful activity that provides tremendous benefits to society.”

People sleep at a cooling shelter set up during an unprecedented heat wave in Portland, Oregon, U.S. June 27, 2021.

Maranie Staab | Reuters

Shell said it is working toward a low-carbon future and does not see a lawsuit as productive.

“The Shell Group’s position on climate change has been a matter of public record for decades. We agree that action is needed now on climate change, and we fully support the need for society to transition to a lower-carbon future. As we supply vital energy the world needs today, we continue to reduce our emissions and help customers reduce theirs,” a Shell spokesperson told CNBC.

“Addressing climate change requires a collaborative, society-wide approach. We do not believe the courtroom is the right venue to address climate change, but that smart policy from government and action from all sectors is the appropriate way to reach solutions and drive progress,” Shell said.

ConocoPhillips and the Western States Petroleum Association told CNBC they don’t comment on active litigation.

BP, Motiva, Occidental Petroleum, Space Age Fuel, Valero Energy, Total Specialties USA, Marathon Petroleum, Peabody Energy, the Koch Industries, and McKinsey did not immediately respond to requests for comment.

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June 23, 2023

Tag: Chevron Corp.

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