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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amerie Hordern. Join us each day
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Speaker 3: Mike Worth, the CEO of Chevron, joins us now for
Speaker 3: an exclusive interview. I am so glad that we're going
Speaker 3: to speak with you, Mike.
Speaker 1: Thank you so much for being here with us. You're welcome, WESA.
Speaker 3: So let's start about that one ninety nine a gallon.
Speaker 3: It might be great for a lot of people in
Speaker 3: terms of filling.
Speaker 1: Up their guest tanks.
Speaker 3: A real question around drill, baby, drill, and how much
Speaker 3: you're incentivized to increase production given the lower cost of oil.
Speaker 4: Well, you know, we make our investment plans on a
Speaker 4: long term basis. We look at supply and demand well
Speaker 4: out into the future, and so the price of oil
Speaker 4: today can affect short term financial performance of the company,
Speaker 4: but it really doesn't play as much into some of
Speaker 4: the longer term investment plans as we look down the road,
Speaker 4: not really out the window as we decide what the
Speaker 4: capital program looks like.
Speaker 5: But how do you reconcile the too sure doing a
Speaker 5: lot of exploration internationally, and to Lisa's point, prices are
Speaker 5: low and potentially are going to even go lower.
Speaker 4: Well, exploration is a long cycle business. We just brought
Speaker 4: a project online in the Gulf of America last year
Speaker 4: where the discovery was made twenty years prior, and so
Speaker 4: the timeline between when you actually make a discovery, when
Speaker 4: you appraise that and you ultimately develop and bring it
Speaker 4: to market can be years or even decades, and so
Speaker 4: we really have to take that long view on the business.
Speaker 4: And in the short term we'll keep cost tight. We've
Speaker 4: guided to industry leading free cash over the next few
Speaker 4: years as we'ringing cost down, capital spending down, increase the
Speaker 4: synergies on the hes transaction. So we're going to deliver
Speaker 4: strong financial performance through the cycle.
Speaker 5: Based on what the IA has said, recalibrated where they
Speaker 5: see oil demand growing. It was twenty thirty, now it's
Speaker 5: twenty fifty. Ope says they had a rendezvous with reality,
Speaker 5: seeing that the world needs a lot more of this,
Speaker 5: a lot more fossil fuels. If outlook is so strong,
Speaker 5: should Chevron, should.
Speaker 1: All of these big oil companies?
Speaker 6: So do they increasing more of that investment.
Speaker 4: Well, on the IEA, even a blow broken clock is
Speaker 4: right twice a day. So they have finally acknowledged what
Speaker 4: we've long known, which is that the world will continue
Speaker 4: using oil and gas for many decades into the future.
Speaker 4: We are in that long cycle business and the capital
Speaker 4: spending amory has become more efficient in our industry. A
Speaker 4: decade ago, we were spending money on big projects. There's
Speaker 4: a lot of growth going on in shale at a
Speaker 4: relatively high cost. Structure in the entire history has found
Speaker 4: ways to standardize designs, simplify projects, and actually get more
Speaker 4: for every capital dollar that we spend, so the size
Speaker 4: of our capital spending doesn't necessarily correlate to the growth
Speaker 4: the way that it would have in years gone by.
Speaker 6: When it comes to expansion.
Speaker 5: The US government is backing this plan of Rock has
Speaker 5: to transfer Louke Oil stakes to an American company, So
Speaker 5: it's really only your x on how are those negotiations going.
Speaker 4: Well, I can't comment on commercial negotiations. What I will
Speaker 4: say is we've got a well established reputation as a
Speaker 4: good partner, as a world class operator in international locations.
Speaker 4: We're sought out as a partner in countries around the world.
Speaker 4: We got long history working in the Middle East, and
Speaker 4: we put a real premium on partnership and that goes
Speaker 4: to every country we work with and every company we
Speaker 4: work with.
Speaker 5: Can you talk about those assets though, do you think
Speaker 5: those would be good assets the Chevron portfolio?
Speaker 4: Well, we always look to strengthen our portfolio. Iraq is
Speaker 4: a country that's blessed with very substantial petroleum resources and
Speaker 4: some of the largest fields in the world, and so
Speaker 4: those are the kinds of things that we always look at.
Speaker 3: If you're talking about the capital profile and investments, and
Speaker 3: how it's become a lot more efficient to make the
Speaker 3: same kinds of investments and frankly the same kind of output.
Speaker 3: Where is this sufficiency coming from. Is it coming from
Speaker 3: artificial intelligence? Is is it coming from just better technology
Speaker 3: and getting oil and gas out of the ground.
Speaker 4: Yeah, So in shale, for instance, which is something the
Speaker 4: US has been a world leader. In a decade ago,
Speaker 4: break evens were seventy or eighty dollars a barrel. Today
Speaker 4: they're not even half of that, as we found ways
Speaker 4: to drill longer laterals, to optimize the spacing of wells,
Speaker 4: to complete wells at lower cost with greater production coming
Speaker 4: out of them. So it's a series of things. In
Speaker 4: the deep water, we've simplified and standardized designs, and what
Speaker 4: used to take thirty dollars a barrel or more in
Speaker 4: terms of cost of capital to go into a project
Speaker 4: now has been cut in half. And so it's not
Speaker 4: driven by AI yet. I do think over time we're
Speaker 4: going to see technologies like that continue this path that
Speaker 4: we're on.
Speaker 1: We're going to get to that in just a second.
Speaker 3: If that's the case, if you can get more even
Speaker 3: at a break even cost, it's a lot lower.
Speaker 1: Why has the rig count gone down so much?
Speaker 3: Why aren't there more rigs coming online given the capacity
Speaker 3: here in the United States?
Speaker 4: Because we can drill more feet per day with a
Speaker 4: rig today than we could in the past, and so
Speaker 4: rig count is not nearly as interesting a metric as
Speaker 4: how many feet a day you can drill how many
Speaker 4: wells you can complete in a period of time, and
Speaker 4: so we're getting more work done out of fewer pieces
Speaker 4: of equipment.
Speaker 3: Today, you talk about how AI isn't delivering those efficiencies yet,
Speaker 3: the indication being that maybe down the road it might
Speaker 3: be the case.
Speaker 1: Where specifically are you thinking.
Speaker 3: And I'm saying at a time when Chevron's cutting staff
Speaker 3: so or other people, is this a headcount issue?
Speaker 1: Is this something else? How are you seeing it being deployed?
Speaker 4: Well, we're in I think we're still the very early
Speaker 4: days of applying AI at scale in our industry. One
Speaker 4: of the things that's undeniable about AI is it needs
Speaker 4: lots of data. A company like ours has as much
Speaker 4: data as just about any company in the world, and
Speaker 4: so we've got decades and decades of geologic data, seismic data,
Speaker 4: operating data, all of which can be used to feed
Speaker 4: these models, to optimize operations, to improve our exploration success,
Speaker 4: to squeeze more production out of existing assets. And so
Speaker 4: we see huge opportunities to run our business with smarter technology,
Speaker 4: get better decisions made faster, and so there's certainly a
Speaker 4: cost dimension to this, but I think the real opportunity
Speaker 4: is going to be about the productivity of our assets
Speaker 4: and our business.
Speaker 5: You announced this project, the first of it's kind, to
Speaker 5: provide natural gas fired power.
Speaker 6: For data centers.
Speaker 5: Do you expect to do more of these projects and
Speaker 5: what's the update on this one in West Texas well.
Speaker 4: Certainly, the demand for power has been talked about now
Speaker 4: for the last year or so, as the constraint in
Speaker 4: the growth of AI data centers and the ambition for
Speaker 4: data centers at a scale we've never seen before has
Speaker 4: become a commonplace. The reality is we need large scale power.
Speaker 4: What we're working on is off the grid power because
Speaker 4: it's also becoming an issue with electricity prices, and we're
Speaker 4: seeing this show up in consumer sentiment and elections. Our
Speaker 4: approach is to develop gigawatt scale power generation, not through
Speaker 4: the grid, but dedicated to data centers. We've got a
Speaker 4: project in a couple of sites actually we're working on
Speaker 4: in West Texas where we've got a lot of natural gas.
Speaker 4: We've got large gas turbines, the largest in the world
Speaker 4: being delivered starting next year, and we're deep into discussions
Speaker 4: with multiple customers that would like to cite data centers
Speaker 4: to use this power.
Speaker 5: You're at the center of a lot of politically very
Speaker 5: important conversations, not just when it comes to AI Sluke
Speaker 5: oil assets, also Venezuela the only American company left.
Speaker 6: Can you give us an update.
Speaker 5: On either conversation with the administration your team on the ground.
Speaker 6: What is the future of Chevron in this country?
Speaker 5: Is the president's sense maybe he's going to send troops there?
Speaker 4: Yeah, I don't know what the presence intentions are. We've
Speaker 4: been in Venezuela for the last one hundred years. Our
Speaker 4: presence there, we believe is important for the local economy,
Speaker 4: the regional economy, the people of Venezuela. The Venezuelan oil
Speaker 4: is sought after by US refiners, and we operate there
Speaker 4: in full compliance with all US law and sanctions. We're
Speaker 4: in discussions with the administration to ensure that we stay
Speaker 4: in compliance, that they understand the value that our presence
Speaker 4: brings to America.
Speaker 6: And so you know that's and you plan on being
Speaker 6: there for the long term.
Speaker 4: Venezuela actually has more oil and gas resource than Saudi Arabia.
Speaker 4: It's right here in our hemisphere, very close to the
Speaker 4: Gulf Coast refining complex. We been there through ups and downs,
Speaker 4: and like many places in the world, we have to
Speaker 4: take a long view on our presence in countries like this.
Speaker 5: You talked about succession yesterday at this conference. How are
Speaker 5: you thinking about that as you talk to the board?
Speaker 5: Is there something you want to get done before you
Speaker 5: hand over the reins?
Speaker 4: Well, succession discussions begin on day one. I think for
Speaker 4: most CEOs it's part of a board's responsibility to be
Speaker 4: thinking about the next generational leadership. I have a long
Speaker 4: list of things, some of which have been accomplished. I
Speaker 4: mentioned the Hest transaction, which was a big one for
Speaker 4: US earlier this year. We have laid out a plan
Speaker 4: for the next several years to investors last month that
Speaker 4: grows free cash flow, that drives a significant return to
Speaker 4: cash to shareholders. All of those are things that I
Speaker 4: want to make progress on. But when the time is
Speaker 4: right for someone to follow me in this job, the
Speaker 4: board will make that determination and I will happily hand over.
Speaker 6: Will you go right for landman?
Speaker 1: Just three seconds left?
Speaker 3: Do you think that in ten years gas or oil
Speaker 3: is going to be more valuable?
Speaker 4: Well, on an energy content basis, you know, oil's got
Speaker 4: about six times more energy content per unit of volume
Speaker 4: than gas does, and so you know they trade in
Speaker 4: sympathy with one another because energy is somewhat fungible. I
Speaker 4: think both of those commodities are going to be essential
Speaker 4: to the global economy. I think demand for both of
Speaker 4: those will be much higher than it is today. And
Speaker 4: I think you're going to see good companies in our
Speaker 4: industry still producing more of that and doing it in
Speaker 4: a way that keeps costs very affordable for the economy.
Speaker 2: Stay with us, multiple impex divanance coming up off to.
Speaker 3: This, Julian Emmanuel of Evercore staying bullets into twenty twenty six,
Speaker 3: writing earning strength, fiscal and monetary stimulus and a capital
Speaker 3: market cycle moving into higher gear are laying the groundwork
Speaker 3: for seven seven fifty at year end twenty twenty six.
Speaker 1: Julian, I am so glad to say is here. Julian,
Speaker 1: thank you for being here.
Speaker 7: Good morning.
Speaker 1: So what do you make of the yields rising this morning?
Speaker 7: Look, the first thing is we have to step back
Speaker 7: and understand something that bond market cycles are very long
Speaker 7: legged things. And the forty year bond bull market ended
Speaker 7: at the pandemic lows in twenty twenty and when you
Speaker 7: think of an Anne Marie. You just detailed all of
Speaker 7: the reasons that yields are going higher, and the answer
Speaker 7: is yes to every single one of them. You put
Speaker 7: it together in our mind. If you think about it,
Speaker 7: it's almost remarkable that the confluence of the US being
Speaker 7: the debt premier destination for capital has actually caused spreads
Speaker 7: against global bond markets to compress. You know, if you
Speaker 7: had said to me Japanese ten year yields were going
Speaker 7: to be close to two percent, I would have told
Speaker 7: you at the beginning of the year, the US ten
Speaker 7: year yields would be close to five percent. And we're
Speaker 7: not there. But all of these pressures are building in
Speaker 7: our mind towards hire yields.
Speaker 3: If we do get a hawkish FED today, is that
Speaker 3: going to diminish some of the optimism that you have
Speaker 3: heading into twenty twenty six or support it given the
Speaker 3: fact that the FED is looking at a rosier economic backdrop.
Speaker 7: So that is the question that is really fascinating in
Speaker 7: our mind, and we're a little bit uncomfortable by this
Speaker 7: incredibly staunch consensus that we are going to get precisely
Speaker 7: a hawkish cut that is going to be bullet for
Speaker 7: stocks in the near term. We actually think long term
Speaker 7: it is bullet for stocks because simply it shows that
Speaker 7: the FED is cognizant of the inflation problem as well.
Speaker 7: But the other issue there, Lisa, is the labor market
Speaker 7: is about as clear as mud. I think whatever, It's
Speaker 7: not even mud, it's just it's unknowable right now. And
Speaker 7: that's really the aspect of the flying blind that is
Speaker 7: probably going to weigh on markets.
Speaker 5: Jillan want to nerves you about the hawkish cut consensus.
Speaker 5: Is it the hawkish part or is the fact that
Speaker 5: people think that is going to be bullish for stocks.
Speaker 7: No, it's actually the deep consensus. So what we've seen
Speaker 7: this year, and our survey team has really been front
Speaker 7: foot on this, particularly during the government data blackout, is
Speaker 7: that anytime we've had really really deep consensus, whether it
Speaker 7: was going back to that week in April where our
Speaker 7: clients eighty one percent of them thought we were either
Speaker 7: in a recession or was going to start in the
Speaker 7: second half, or going back to the end of October
Speaker 7: when a record seventy five percent of our clients responded
Speaker 7: in our polling that the next ten percent in the
Speaker 7: S and P five hundred was up and then you
Speaker 7: immediately had that five percent pullback. That's what bothers us
Speaker 7: and just the consensus around the fact that this is
Speaker 7: likely to be bullish, And frankly, if this was any
Speaker 7: other month than December, it probably would not be as
Speaker 7: sharp a consensus. But December tends to be a good
Speaker 7: month for stocks. We think there is a potential for
Speaker 7: surprise here.
Speaker 6: Like what what's the surprise?
Speaker 7: Well, look, if you look at last year, you had
Speaker 7: a hawkish cut at the December FOMC last year and
Speaker 7: the market pulled back. It didn't derailable market in any way,
Speaker 7: shape or form, but it made December an unexpectedly volid
Speaker 7: a month. And you add in the fact that you're
Speaker 7: going to get data, employment data on the sixteenth. Who
Speaker 7: the heck ever heard of the FED talking and then
Speaker 7: getting the data.
Speaker 1: It's just it's ridiculous. You're speaking Emory's language.
Speaker 3: She's saying, come on, move the meeting so we can
Speaker 3: actually get that data. It's not just the employment data,
Speaker 3: it's also a question around the big tax space and
Speaker 3: exactly what they are doing. I think about John Stoltzfiz.
Speaker 3: He comes in every day singing, is how you do
Speaker 3: the things you do? And it's sort of this question
Speaker 3: around Oracle, which reports earnings after the bill, how much
Speaker 3: are they, yes pluting for.
Speaker 1: Expansion, going to beat expectations, but.
Speaker 3: Continue building their debt pile in a way that seems
Speaker 3: not unsustainable but potentially a little more precarious when it
Speaker 3: comes to capital markets.
Speaker 7: Yeah. No, And actually, from our point of view, the
Speaker 7: concern around the debt loads of these companies, this one
Speaker 7: in particular, is quite rational if you think back to
Speaker 7: this whole talk about an AI bubble, which we don't
Speaker 7: believe we're anywhere near the endgame yet at all in AI,
Speaker 7: But if you think back to the late nineteen nineties,
Speaker 7: the concern was just just a random throwing money at
Speaker 7: everything everywhere without revenues. And in that respect, having a
Speaker 7: little bit of capital markets discipline to around a company
Speaker 7: that is assuming a bigger debt load is very, very measured,
Speaker 7: and it shows that people are not losing their heads.
Speaker 7: But our question is is that when those earnings are
Speaker 7: announced this afternoon, is it more the sense that the
Speaker 7: AI bubble is going to pop? We think it might
Speaker 7: actually be more of the sense that the fear bubble,
Speaker 7: as reflected by the credit the fault swap market may pop.
Speaker 3: In other words, the idea that people are pricing in
Speaker 3: the highest chance of some sort of default or demanding
Speaker 3: the highest amount of compensation for default from the likes
Speaker 3: of Oracle going back to two thousand and nine, that
Speaker 3: might have to diminish.
Speaker 1: I do want of the Fed's role.
Speaker 3: Putting these two stories together, what is the Fed's role
Speaker 3: in lifting the AI bubble? This idea that if the
Speaker 3: FED is overly easy and I say overly based on
Speaker 3: the economic conditions what they might warrant, does that lead
Speaker 3: to an inflation of some of these valuations and frankly
Speaker 3: the debt profiles of some of these companies that raises
Speaker 3: your concern.
Speaker 7: It certainly could, and we have said for the last
Speaker 7: several months that given this sort of extraordinary time that
Speaker 7: we're in, where earnings are going to be good, the
Speaker 7: economies humming along, even with the questions around labor. But
Speaker 7: the point is both the monetary and fiscal stimulus really
Speaker 7: do have the potential. We've said there's a thirty percent
Speaker 7: chance that you get a full on bubble next year,
Speaker 7: which we defined as nine thousand in the S and P.
Speaker 7: Five hundred, which I think is also why on balance,
Speaker 7: the FED is trying to remind everyone of the dual
Speaker 7: mandate in general. But again, the questions around the labor
Speaker 7: market are very very intense.
Speaker 3: Especially given Joel Statia came out yesterday and just added
Speaker 3: to this confusion, given the fact that the headliness number
Speaker 3: came in pretty well, and then you saw the quits
Speaker 3: number coming at the lowest pace going back to May
Speaker 3: of twenty twenty, So choose your own adventure. Is gold
Speaker 3: telling us something? Because I was looking at the move
Speaker 3: since the last FED meeting and what stands out to
Speaker 3: me ten year yields, thirty year yields and gold up
Speaker 3: seven percent in that.
Speaker 1: Period of time.
Speaker 3: Are we getting a signal there about the path of
Speaker 3: travel right now in terms of the US's role in
Speaker 3: terms of fiscal doleance, when it comes to the US dollar,
Speaker 3: and when it comes to just going forward.
Speaker 1: What people think about this policy?
Speaker 7: Well, gold has really the last couple of years been
Speaker 7: a portfolio diversifier. And then from our perspective, you know,
Speaker 7: you saw what we believe is a reasonably significant dollar
Speaker 7: top in the first quarter of twenty twenty five, So
Speaker 7: gold it tends to trade better on that I would
Speaker 7: say Frankly, you know, gold has actually lagged the last
Speaker 7: month or two as silver has has shot the moon.
Speaker 7: That to us says that there's probably a pause in
Speaker 7: the precious metals frenzy coming, you know into twenty twenty six.
Speaker 2: Stay with us. Multiple impex of viands coming up. Off
Speaker 2: to this, turning.
Speaker 3: Back to the federers or President Trump reportedly planning to
Speaker 3: start his final round of interviews for the FED shair
Speaker 3: in the coming days. The front runner believed to be
Speaker 3: National Economic Council Director Kevin Hassett, who said there's quote
Speaker 3: plenty of room to cut. Joining us now as someone
Speaker 3: who disagrees with that statement, Lindsay Pie of Stifhel lindsay,
Speaker 3: you've been really vocal on the fact that you do
Speaker 3: think that inflation is very much a preeminent concern and
Speaker 3: is being underplayed by this particular FED. How much do
Speaker 3: you expect that to come to bite the FED when
Speaker 3: it comes to BILLI yields, which is what we're seeing
Speaker 3: this morning.
Speaker 8: Well, I think the FED is well aware of the
Speaker 8: fact that inflation remains a very sizable problem. As we
Speaker 8: see the majority of FED officials have come out and
Speaker 8: spoken against or at least question the need for further
Speaker 8: rate cuts. So there's a very clear divide among Fed
Speaker 8: officials right now, some focused on the employment component, but still,
Speaker 8: as I mentioned, a majority concern that we did not
Speaker 8: do enough the first time around to reinstate price stability.
Speaker 8: And now it becomes even more of a challenge for
Speaker 8: the Fed to get us back to two percent, having
Speaker 8: left price as well above that target level for so
Speaker 8: many years.
Speaker 3: Now, where's the inflationary pressure coming from? Given the fact
Speaker 3: that people have seen prices actually come down not just
Speaker 3: disinflation but outright deflation.
Speaker 1: A couple of rent metrics, and.
Speaker 3: We are seeing pretty contained price increases, certainly during the
Speaker 3: holiday season, even on consumer goods.
Speaker 1: So what's going to drive this? So there still is
Speaker 1: some improvement.
Speaker 8: We have seen some improvement as you mentioned, in these pockets,
Speaker 8: but when we look at the cost of services, this
Speaker 8: is still going up consistently over three tenths on an
Speaker 8: average monthly basis, So that's continuing to fuel these overall
Speaker 8: annual inflation numbers up near three percent. Remember, it was
Speaker 8: never about getting us down from eight to six to
Speaker 8: four close to two percent, but back to two percent
Speaker 8: on a sustained level, and the Fed failed, as I mentioned,
Speaker 8: to really bring us to that sufficiently restrictive level the
Speaker 8: first time around, stopping short at five and a half,
Speaker 8: and so now the FED continues to contend with above
Speaker 8: trend price pressures.
Speaker 5: Does this get worse when the President gets his pick
Speaker 5: for the FED chair?
Speaker 8: I think the FED is going to have more of
Speaker 8: a lean to the dubbish side. There may be more
Speaker 8: of an inclination to air on the side of additional
Speaker 8: rate huts as opposed to holding steady, moving to the
Speaker 8: sideline waiting for the data, depending on who takes the
Speaker 8: lead at the FED. But remember all of these members
Speaker 8: are pro growth, pro market economists that they're looking to
Speaker 8: support the economy. They're looking to meet the Fed's dual mandate,
Speaker 8: and they will base policy appropriately to achieve that legally
Speaker 8: mandated a great goal.
Speaker 5: When you look at potentially inflation next year, where is
Speaker 5: that coming from? Is that coming from like almost a
Speaker 5: self induced crisis in Washington because the one big beautiful
Speaker 5: bill and maybe these two thousand dollars dividend check.
Speaker 8: Well, so this is one of the biggest concerns right now.
Speaker 8: We're looking at inflation and we're saying, okay, there's not
Speaker 8: necessarily a tremendous amount of upside momentum that we're concerned about.
Speaker 8: But as we turn the calendar page, if we see
Speaker 8: a stronger growth profile than expected. Right now, according to
Speaker 8: the Atlanta Fed, we could see Q three GDP up
Speaker 8: over three and a half percent, much stronger than what
Speaker 8: the FED had anticipated. We're still seeing a very spendy,
Speaker 8: solid consumer as we go into this holiday shopping season.
Speaker 8: And my biggest concern is businesses drawing down inventories, eating
Speaker 8: into profit margins. If they begin to pass through more
Speaker 8: of these teriff related or other policy related costs onto
Speaker 8: the end consumer, any one or a combination of those
Speaker 8: factors is going to drive inflation higher. So we can't
Speaker 8: get ourselves in a position where the FED eases dramatically
Speaker 8: and then quickly we have to reverse course because inflation
Speaker 8: is taking off up near four percent or beyond.
Speaker 3: I just feel this, but but coming in all these
Speaker 3: people who are listening to this saying, but that GDP
Speaker 3: number was really driven by data center investment, and what
Speaker 3: we're seeing right now potentially next year is greater efficiency,
Speaker 3: greater productivity that could fuel both growth but also a disinflation.
Speaker 8: There is this inflation on the AI side, absolutely increasing productivity,
Speaker 8: increasing efficiencies as you mentioned, but there's also an inflationary
Speaker 8: component too, driving demand higher for these AI services, as
Speaker 8: well as this sizeable energy component driving higher demand for
Speaker 8: data centers. So it's not necessarily a clear cut argument
Speaker 8: that AI is going to or other technologies are going
Speaker 8: to drive inflation down. There still are a lot of
Speaker 8: question marks, and if we factor in tariffs, if you
Speaker 8: factor in consumer and growth prospects, I think the risk
Speaker 8: still remains of the upside.
Speaker 3: Where's the political risk here in the case that you
Speaker 3: just made you talk about how it can be inflationary
Speaker 3: and then you think, okay, energy costs and we are
Speaker 3: going to be speaking with the Chevron CEO Mike Worth
Speaker 3: later on. It should be a great moment for energy costs,
Speaker 3: at least from the producer side, because you should see
Speaker 3: them going up because of how much energy is into
Speaker 3: make well.
Speaker 8: We have seen energy go up over forty percent in
Speaker 8: just the last five years, but we haven't seen.
Speaker 1: Oil prices go up.
Speaker 3: And this is sort of the question of at what
Speaker 3: point can you factor in government interference in trying to
Speaker 3: skew prices to the downside because of some of the
Speaker 3: political concerns, leaving a sort of subdued inflation, even if
Speaker 3: the supply demand dynamic might otherwise signify something else.
Speaker 8: So there will be pressure on the administration to step in.
Speaker 8: As we know, the fastest way to derail the American
Speaker 8: consumer is sustained heightened energy prices, and that will show
Speaker 8: up in the polls via the mid or other and
Speaker 8: so there will be a lot of pressure on the
Speaker 8: administration to step in, not necessarily with a long term solution,
Speaker 8: but certainly with some short term reprief Well.
Speaker 6: That's with electricity.
Speaker 5: Is it balanced out with the fact that the President
Speaker 5: last night was talking about gasoleen and dollar ninety nine.
Speaker 5: So then I looked and actually, there is a gas
Speaker 5: station in Oklahoma that has a gallon for dollar ninety nine.
Speaker 6: In Colorado for dollars sixty nine.
Speaker 1: The gas buddy has everyone mapped.
Speaker 5: Out, and I said, wow, they really are that low,
Speaker 5: below two dollars a gallon.
Speaker 6: But the issue people have at home is electricity price, right,
Speaker 6: and so they negate each other.
Speaker 8: For the household balance sheet, the average consumer will look
Speaker 8: at where they're allocating those funds, be that to the
Speaker 8: gasoline tank or be that to the household energy bill,
Speaker 8: and so if one is improving and the other isn't,
Speaker 8: we're still going to feel that pressure as normal consumers,
Speaker 8: normal spendors.
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