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Relief at the Pump Could Come Soon. Thank Saudi Arabia.

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Oil prices fell Thursday after the Financial Times reported that Saudi Arabia was ready to increase output as more sanctions on Russia threaten global oil supply.

Saudi Arabia is the largest oil producer in OPEC as well as the producer with the most spare capacity to help ease supply constraints. OPEC supplies about 36% of the world’s crude oil. OPEC plus Russia supplies about half.

Benchmark crude prices declined about 2% on the news. That’s good, but prices are still north of $110 a barrel, up more than 45% this year and up about 20% since Russia invaded Ukraine in late February.

U.S. gasoline prices, of course, have soared along with oil, rising more than 40% in 2022 and jumping more than 30% since the Ukraine invasion. Prices for regular gasoline have risen to $4.67 a gallon and $5.33 for premium, according to AAA.

Rising prices are painful for U.S. consumers. The one consolation for U.S. investors is the performance of U.S. oil stocks. Oil producer and refining stocks in the

S&P 500
this year have risen more than 60%. Oil, perhaps unsurprisingly, is the best performing sector in the index so far in 2022.


Exxon Mobil

and


Chevron

shares fell about 1% to start Thursday, trading lower with oil and shaving a little off their 2022 gains.

Investors might not like it, but at this point drivers will take whatever they can get.

—Al Root

*** Join Barron’s senior managing editor Lauren R. Rublin and deputy editor Alex Eule today at noon as they discuss the outlook for tech companies and individual stocks. Sign up here.

***

Facebook’s COO Sandberg to Quit, Keep Board Seat

Sheryl Sandberg’s plan to step down as chief operating officer of Facebook parent


Meta Platforms

comes as the company continues to navigate perceptions about its cultural influence, its competitive positioning and its attempt to transform itself into a leading developer of the metaverse.

Sandberg told CNBC on Wednesday that stepping down after 14 years at the company will allow her to focus on philanthropy. Product executive and Chief Growth Officer Javier Olivan will become the next COO, the company said.

Facebook founder Mark Zuckerberg renamed the company Meta Platforms last year and said it would become a key player in the metaverse, which is an idea for an interactive online world. Advertising has stumbled since


Apple

made changes to its privacy settings.

Sandberg said she would leave Meta in the fall but keep her seat on the company’s board of directors. Before joining Facebook in 2008, she was an executive at Google.

What’s Next: Meta starts trading under a new stock ticker symbol, META, on June 9 after trading under FB since its initial public offering in 2012. The change is being made to reflect its focus on building the metaverse.

Liz Moyer

***

Fresh Data on Manufacturing and Jobs Point to Inflation

Fresh data on manufacturing and jobs on Wednesday emphasized continued inflationary pressure. A tight labor market produced 11.4 million job openings in April, meeting expectations but still near record levels as demand for workers exceeds the number of unemployed people.

The Institute for Supply Management’s manufacturing index was 56.1 for May, up slightly from April, which indicates manufacturers are seeing strong demand despite rising interest rates. In addition, 4.4 million people quit their jobs in April even as wages rose.


JPMorgan Chase

CEO Jamie Dimon warned people to “brace” for an economic hurricane, as Federal Reserve efforts to combat inflation by raising rates and the uncertainty of Russia’s war in Ukraine cloud the outlook. “That hurricane is right out there down the road coming our way.”

Atlanta Fed President Raphael Bostic told MarketWatch some of the economic uncertainty could be resolved by September and labor-market imbalances could ease, leading to a “significant” reduction in inflation.

CEO Elon Musk wants


Tesla

employees back to the office, according to an internal email that got posted to Twitter. Employees who wish to work remotely must be in the office for a minimum of 40 hours a week, the email said, or depart Tesla.

What’s Next: Bostic told MarketWatch a possible pause in Fed rate increases come September shouldn’t be interpreted as a “Fed put,” or the idea that the central bank comes to the rescue of markets.

Luisa Beltran

***

Pfizer Seeks Approval for Covid Vaccines for Young Children

The Food and Drug Administration will review data on June 15 submitted by


Pfizer

and


BioNTech

as part of their request to approve Covid-19 vaccines for children six months to under five years old, a group that still doesn’t have access to Covid vaccines.

Pfizer said a three-dose series of its Covid vaccine was highly effective at protecting children in this younger age group.


Moderna

has also asked the FDA to approve its vaccine for children aged six months to under six years, though it has asked for a two-dose series.

The FDA and other agencies are also helping the Biden administration’s efforts to resolve a shortage of baby formula.


United Airlines

will bring 3.7 million 8-ounce equivalents of Kendamil formula from the U.K. to multiple airports across the U.S. over three weeks.

The White House also announced flights on June 9 and 11 to bring 4.6 million 8-ounce equivalents of formula made by


Bubs Australia

from Melbourne to Pennsylvania and California.

The White House said the FDA and Agriculture Department have been working on the formula issue since February but couldn’t provide details about why President Joe Biden wasn’t notified of the shortage until April.

What’s Next: Enfamil maker


Reckitt

said at a While House meeting on the shortages that it is working with retailers such as


Walmart
,


Target

and


Kroger

to get its trucks unloaded first and its product on their shelves faster.

Liz Moyer

***

GM CEO Backs $280 Billion in Annual Revenue by 2030


General Motors

CEO Mary Barra discussed the auto maker’s electric vehicle ambitions, overcoming perceptions that GM is behind in the EV race, and how she expects EVs to make up between 40% to 50% of new car sales by 2030 in a Q&A with Barron’s.

EV sales as a percentage of all new car sales are currently in the single digits. Boosting adoption will mean winning over people who own one vehicle, Barra said, and GM is developing a full range of options. The “sweet spot” is $30,000 to $35,000.

GM has the EV Hummer and is planning to roll out a Hummer truck and SUV along with EV offerings under the brands Bolt, Cadillac, Silverado, Chevy Blazer and GMC Sierra, plus a couple “I don’t think we’ve talked about” by the end of next year, Barra said.

Chinese electric-vehicle makers


NIO
,


XPeng
,
and


LI Auto

delivered 28,645 EVs in May, up from 18,243 vehicles delivered in April. The 28,000-plus figure is the best result since March, just before a Covid resurgence slammed auto production across the country.

XPeng delivered 10,125 vehicles in May, up 12% from the number of vehicles delivered in April, and NIO delivered 7,024 vehicles in May, up 38%. Li Auto delivered 11,496 vehicles in May, more than double the prior month.

What’s Next: GM has deals addressing battery production, battery materials and supplies of rare earth minerals, in addition to a deal with Wolfspeed to ensure a supply of chips. On achieving GM’s target $280 billion in annual revenue by 2030, Barra told Barron’s “we do what we say we’re going to do.”

Al Root and Luisa Beltran

***

My house was damaged in a natural disaster. Is my casualty loss tax-deductible?

The U.S. is a big country, and recurring natural and manmade disasters are inevitable. This year, we’ve already had tornadoes and wildfires. Hurricane season is about to commence, and forecasters are predicting a busier than average spate of storms. Batten down the hatches. If you’re unlucky enough to suffer a disaster-related loss, here’s what you need to know about the federal income tax implications.

In theory, the federal income tax rules allow you to claim an itemized deduction for personal casualty losses that are not covered by insurance. A casualty loss occurs when the fair market value of an asset is reduced or wiped out by hurricane, wind, flood, fire, earthquake, volcanic eruption, sonic boom, and the like, or by theft or vandalism.

In reality, however, many disaster victims don’t qualify for personal casualty loss write-offs.

Read more here.

Bill Bischoff

***

—Newsletter edited by Liz Moyer, Joe Woelfel, Stacy Ozol

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