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Gas Prices Ticking Up as Oil Companies Report Massive Profits; Pentagon Gives Update on Russia's Invasion of Ukraine; NATO Scrambles Jets Multiple Times to Intercept Russian Planes; Biden to Take Extra Precautions at White House Correspondents Dinner. Aired 1:30-2p ET
Aired April 29, 2022 - 13:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[13:33:39]
ANA CABRERA, CNN HOST: You probably already know gas prices are claiming higher again. The national average is up to $4.16 a gallon. And while so many Americans are struggling because of prices like this, oil companies posted massive profits again.
Chevron just quadrupled its first quarter profit, $3.6 billion compared to $1.4 billion a year ago during that same period. Exxon pulled in $5.5 billion during the first quarter, up from $2.7 billion last year. That's despite losing $3 billion from pulling out of Russia.
Joining us is Patrick De Haan, the head of petroleum analysis for GasBuddy.
Patrick, we've been covering high gas prices for some time on this show. I know oil companies don't directly set the prices at the pump. We're talking giant profits while everyday Americans are suffering.
You can't tell me corporate greed isn't a factor here?
PATRICK DE HAAN, HEAD OF PETROLEUM ANALYSIS, GASBUDDY: It's really not. You look at what you mentioned. Market set prices.
Keep in mind you mentioned some of the $5 billion profits that some of the oil companies have been producing this year. Let's put it in context as well.
Because oil is something that we consume to the effect of 20 million barrels a day. So these numbers are, of course, going to sound significant But look at the profit margin of the oil sector. That's relatively low.
[13:35:04]
And keep in mind, in 2020, the oil sector, just five of the major oil companies lost $76 billion combined. The numbers sound significant, but the profit margins are not.
And Americans are feeling pain at the pump, but this is a function of economics, supply and demand.
CABRERA: Sure.
(CROSSTALK)
DE HAAN: Of course, demand is remaining relatively high.
CABRERA: Hold on for a second. Hold on. You said, you know, profits aren't significant. I think anybody, anybody with common sense would say, yes, billions of dollars in profit is significant.
And if it is about supply and demand, the oil companies themselves are the ones saying that they're not boosting supply because profits are driving that decision.
DE HAAN: Well, and keep in mind, what I had potentially meant to say was that the profit margin is not significant. You look at a company like Apple that itself alone made $95 billion.
Yes, I mean, oil companies have been disciplined. What we've called disciplined or slow to raise production. But a lot of that is because of political talking points that the oil industry -- would you rush back to invest in the company that the president has targeted?
And that's where politicians comes into the fore right here. Oil companies are cautiously raising the amount they're spending on drilling because they don't know if that money is going to be sunk in the ground and lost to an administration that's been a little bit hostile to the oil and gas sector.
CABRERA: But, again, coming back to the graph, investor pressure to maintain capital discipline is the driving factor here. The primary reason that publicly traded oil producers are restraining growth despite high oil prices.
Government regulations way down here, less than 10 percent.
DE HAAN: Well, and again, I do expect that that chart, which was probably pulled a couple months ago here before oil prices jumped, oil companies are changing their tune here.
We are seeing drilling pick up. U.S. domestic oil production is now one million barrels a day higher than just a year ago. We're moving in the right direction.
And the longer oil prices remain elevated, the more clarity oil companies get into the administration, the more likely they'll start to increase production.
We're starting to get the signals. And oil production will continue to go up by the end of the year.
Keep in mind, before Russia, we had anticipated that, at the end of the year, gas prices would be lower because of the exact story, that production will increase over time toward the end of the year as we get more certainly. But now, of course, that's going to be accelerated because oil prices are higher.
But you can't avoid the fact that Americans are spending record amounts at the gas pump. Not only that, but diesel prices today hitting a new record of $5.16 a gallon.
Of course, oil companies are going to show robust profits. Refiners as well. But that will probably change in the years ahead as oil production comes up, prices will go back down.
CABRERA: But to be clear, this poll was of 132 oil and gas firms. It was taken between March 9th and March 17th. So a little over a month ago.
I guess the bottom line here is, if drivers have to pay more and have to take the financial hit, Patrick, how do you get these big oil companies to have a smaller slice of the pie?
DE HAAN: Well, you know, it's government. I think we're already seeing smaller drillers are the ones that are really active in raising production.
There have been a lot of stories that the big oil companies are sitting on the sidelines and the little guys are filling in. I think that's drawing in bigger oil companies to rethink and get back into increasing production, watching oil prices go up.
Eventually, shareholders are going to want the return. So I think that's why this is a problem that will solve itself over time.
And again, going back to the fact that these oil companies, just five of them lost $76 billion in 2020. They need to be careful with how quickly they put their assets back into the ground.
Because COVID is still a thing. You never know if it could flare up. Look at what's happening in China. COVID resurges and oil prices plummeted.
Look at after Omicron. Oil prices went from $80 back down to $55 overnight. There's a lot of weariness in the market right now that's maybe holding oil companies back.
CABRERA: So $6.3 billion in profits for Chevron, $5.5 billion for Exxon in that first quarter of this year.
Patrick De Haan, I appreciate your time and expertise and analysis. Thank you.
[13:39:35]
We have new details on Trevor Reed, the American freed from Russia. How he's doing, what he's saying, and his plans for the future.
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CABRERA: Welcome back. Let's go straight to the Pentagon where officials are taking questions on the situation in Ukraine.
JOHN KIRBY, PENTAGON PRESS SECRETARY: -- our skills, bringing them out for like a week.
So we're trying to give them systems, new systems -- if we're going to give them new systems, we're trying to give them systems that are roughly akin to what they're used to and won't require an onerous amount of training this. That the focus right now.
I won't get ahead of situations right now. But right now, because they're in such an active fight, we don't want to belabor them with long, complicated training that also requires a high number of personnel.
[13:45:10]
I mean, because they are in an active fight right now. And they, too, are suffering casualties on the battlefield. We want to be respectful of that.
UNIDENTIFIED REPORTER: So just on the $33 billion package that the president is sending over, once Congress does approve that, once if does any of this have to be sent by the end of the fiscal here? And does that limit cause any issues particularly for the replenishment?
KIRBY: I think that will be determined by Congress, some of it, in what they approved and the supplemental request. As the president said, if we get speedy approval on this, this funding will probably get us through five months. So that certainly gets you well within the fiscal year.
What we're planning on is being -- assuming it's approved and as you heard the secretary say, we urge Congress to approve this in a speedy way.
We would expect that this would be actionable on our part, well within the bounds of the fiscal year.
UNIDENTIFIED REPORTER: And then just as a follow-up, are we going to hear more about the capabilities that we would be transferring to Ukraine?
KIRBY: You sure will. Yes.
UNIDENTIFIED REPORTER: And when do you understand that these capabilities will be delivered?
KIRBY: Look, you talk about the supplemental. So first it has to get approved.
But I can tell you that Pentagon planners are already putting pen to paper and working with the Ukrainians on what they would need once we get approval and sort of where we're at.
We still have some drawdown authority available to us as well, but this would be on top of that. So we're already --
CABRERA: We're going to keep monitoring this press conference. We'll bring you additional information as we learn it.
In the meantime, we're also learning today just how close Russia and the West have come to potential military confrontation. NATO Air Fighter Command says fighter jets scrambled not once but multiple times this week to intercept Russian aircraft near alliance air space.
CNN's Barbara Starr joins us now from the Pentagon.
Barbara, what happened?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Ana, I think it all goes to what you were just hearing at the press conference a minute ago.
This conflict by all accounts appears to be expanding, growing, and a great sense here at the Pentagon it is going to last for some time. This is not going to get resolved any time soon. It's something that could go on for months.
You heard John Kirby talk about the funding they want from Congress may last for five months. Every indication this could go on even longer than that.
And now what the Russians have done is they may be pinging. They may be testing NATO air space to see about responses.
What we found out today from NATO itself was, since Tuesday of this week, there have been multiple times when multiple aircraft from NATO nations have had to scramble both over the Baltic and the Black Sea, because Russian aircraft have approached in an unidentified fashion.
And so the countries that were responded were Poland, Denmark, France, Spain, Romania and the United Kingdom. U.S. aircraft were not involved. We're told it was all safe and professional.
But it's a very interesting situation where, in four days, the Russians approached either singly or in pairs of aircraft multiple times over the Baltic and the Black Sea compelling NATO to respond and fly its own aircraft -- Ana?
CABRERA: Barbara Starr, thank you for that reporting.
After three long years of anguish, Trevor Reed's mother describes the first few hours reunited with her son as heaven.
In an interview with ABC, the Reed family shared details of how Trevor is doing following his release from a Russian prison. Trevor's sister says her brother is just happy to be around people again.
(BEGIN VIDEO CLIP)
TAYLOR REED, SISTER OF TREVOR REED: Considering all he's been through and the recovery ahead of him, his spirits are bright. He's telling stories. He's flirting with the nurse staff.
(LAUGHTER)
REED: It's great. It's great to see him.
GEORGE STEPHANOPOULOS, ABC ANCHOR: You say he's flirting with the nurse staff. What does his girlfriend think about that?
(LAUGHTER)
REED: Well, I don't think she knew that until just now.
(LAUGHTER)
(END VIDEO CLIP)
CABRERA: Such a great detail. Flirting with the nurse staff.
Reed's mom says once Trevor regains his health fully, he will then start advocating wholehearted for the release of these other U.S. citizens, Paul Whelan and Brittney Griner still held in Russia.
[13:49:36]
We'll be right back.
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CABRERA: White House communications director, Kate Bedingfield, is the latest high-level administration official to test positive for COVID. Bedingfield made the announcement this morning on Twitter. She said she isn't considered a close contact of the president, according to CDC guidelines.
The news comes just one day before the White House Correspondents Association Dinner where the president will be in close proximity to a number of people.
CNN's Arlette Saenz is at the White House.
Arlette, there's concern this could become a super spreader event. What precautions is the White House taking?
ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Well, Ana, President Biden is going to take some extra steps to try to lower the chances of him contracting COVID-19 while at this massive dinner tomorrow night.
The president will only be attending the speaking portion of the event. He will not be on hand for the actual dinner.
And when he is not speaking, he will be wearing a mask. That is something different than what we've seen from the president at some of the events at the White House and on the road where he has gone maskless in recent days.
[13:55:02] Of course, he'll be seated up on a dais, not seated among the masses.
But the White House Correspondents Association is also establishing some other protocols for the more than 2,500 attendees who will be on hand. Everyone must be fully vaccinated, and they need to have a negative COVID test that is conducted on the same day, tomorrow.
But, of course, there's some anxiety heading into this dinner after, just a few weeks ago, there was another big dinner, the Gridiron Dinner, where dozens of attendees contracted COVID-19. There are protocols different than that dinner.
We're told that President Biden tested negative for COVID-19 yesterday. It expected he will be testing tomorrow just as the attendees are required to do.
But, yes, the White House is trying to take these extra precautions to ensure the president is protected at this dinner.
CABRERA: Arlette Saenz, thank you.
Stanley Tucci is taking viewers around Italy for a second time. It begins again this weekend. His first stop is the remarkable city on stilts, Venice.
Here is a preview of season two.
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UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)
STANLEY TUCCI, HOST, "And these are a traditional snack.
UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)
TUCCI: It's only 8:30. A Venetian breakfast is eaten standing up, washed down with a glass of wine known as a shadow.
UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)
TUCCI: This is fast-food lagoon style. The word means nothing. Ironic because it is really something.
UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)
TUCCI: Oh, my god.
UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)
TUCCI: I'm coming over here so I can see it. Look at that. Oh, my god.
(END VIDEO CLIP)
CABRERA: And look at that. The all-new season of "STANLEY TUCCI: SEARING FOR ITALY" premiers this Sunday at 9:00 p.m. Eastern right here on CNN. Just in time for lunch after watching that clip. That does it for me.
I hope you have a fantastic Friday and safe weekend. I'll see you back here Monday, same time, same place. Until then, let's catch up on Twitter. You can find me, @AnaCabrera.
The news continues with Alisyn after a quick break.
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