MARKETWIRE ALERTS

MarketWire Afternoon News July 31:

Updated at 5:05 PM ET

HEADLINES:

— CITGO Reports Emissions from FCC at Corpus Christi Refinery

— Baker Hughes: Weekly North America Rigs Rise By 16 to 807

— Analysis: Refining Margins Soar as Markets Diverge in July

— Chevron Q2 Profit Up Almost 5-Fold Y-o-Y On High Prices

— Exxon Q2 Profit Doubles Y-o-Y to $14.5B On Solid Execution

NEWS

CITGO Reports Emissions from FCC at Corpus Christi Refinery

CITGO reported an emissions event at the No. 2 fluid catalytic cracking unit (FCCU) Unit at its 167,000 bpd Corpus Christi Refinery West Plant due to a valve failure, according to a filing with the Texas Commission on Environmental Quality.

The incident began at 5:41 p.m. on Wednesday (7/29) and ended at 1:55 a.m. on Thursday (7/30).

“The FCCU2 unit experience a sudden unplanned shutdown due to a valve failure. The Electrostatic Precipitators (ESPs) were turned off as part of the safety shutdown logic, resulting in excess opacity. The valve was repaired, and unit startup began on July 30, 2026,” according to the initial filing reported late Thursday (7/30).

Precipitators went offline, sending opacity levels soaring to 66% — more than three times the 20% permitted ceiling.

CITGO Operations personnel responded to minimize emissions and stabilize refinery process units during the unplanned shutdown and controlled startup, the company said.

This is the third emission reported at CITGO’s Corpus Christi refinery within two weeks.

Baker Hughes: Weekly North America Rigs Rise By 16 to 807

North American energy drilling activity increased this week, Baker Hughes’ weekly rotary rigs report released Friday (7/31) showed, with the regional count growing by 16 to 807.

Year on year, rigs for Canada and the United States combined were up 90 from the 717 actively deployed in the exact same week of 2025.

The present week’s higher numbers were driven by Canadian activity jumping by 15 rigs, alongside a modest gain of one rig in the U.S. In the U.S. alone, oil-directed rigs rose by one to 451, while gas-directed drilling numbers were unchanged at 127.

Miscellaneous rigs in the domestic market were also flat, holding at a total of 10. By trajectory, directional U.S. rigs rose by three to 51, while horizontal units fell by one to 523 and vertical rigs dropped by one to 12.

Analysis: Refining Margins Soar as Markets Diverge in July

U.S. refiners have over the past few weeks operated at near-maximum capacity, resulting in the fastest U.S. crude processing pace in seven years and record high diesel production. Some product cracks soared to new all-time highs, propelled by a growing divergence between fuels and crude oil balances.

U.S. refiners have during the ongoing Hormuz crisis become a swing supplier of refined fuels to the global market. Gasoline, diesel and jet fuel exports have over the past months set new record highs. High margins had domestic refiners operate far above typical seasonal levels, an effect that intensified in July with the jump in crack spreads and seasonally rising domestic demand. Consequently, crude throughput set a new post-pandemic high despite considerably less available refining capacity. Over the past four weeks, U.S. refiners utilized 96.3% of operable capacity, compared to 94.9% in the same period in 2025. Net crude oil inputs averaged 17.14 million bpd, up 212,000 bpd year-on-year, despite a 110,000 bpd drop in capacity. Refiners also continued to optimize operations toward maximizing yields of the most profitable parts of the barrel, leading diesel output in July to top year-ago levels by 200,000 bpd and the five-year seasonal average by nearly 300,000 bpd.

Sustained operations near maximum capacity and maintenance deferments greatly increase outage risks. What’s more, the lack of spare fuels production capacity means that any supply disruption will be hard to replace. These factors served as yet another catalyst for the surge in refined product prices, with consequently rising margins ironically incentivizing refiners to continue to run their units as hard as possible.

A Tale of Two Markets

In July, oil prices clawed back much of last month’s losses amid mounting oil supply disruptions and a reheating U.S.-Iran war. While the crude market experienced some temporary respite from an uptick in oil flows through Strait of Hormuz, global fuels supply remained tight.

Fuel and crude oil demand have both suffered from the ongoing Middle East supply disruption, but to unequal degrees and for different reasons. Export bans across Asia, and a dip in global fuels demand caused by the price spikes led to softening crude demand. However, the main driver of crude demand destruction was the supply disruption itself. Refiners in Asia were forced to slash runs by millions of bpd amid the sudden loss of their primary crude oil source. The latter effect was absent on the fuels side, leading to a much steeper demand drop for crude than for fuels. Much of the oil consuming world approaching main travel season added to the demand divergence.

On the supply side, in contrast, crude oil and refined products moved in parallel. In addition, the world was able to partially feather the crude shortage by drawing on well-stocked inventories, an option which was much more limited with refined products. Finally, the brief reopening of the Strait of Hormuz last month led to a sudden wave of crude oil inundating the market, as hundreds of laden tankers which have been stranded for months were able to leave. All these factors combined led to a growing dissonance between crude oil and fuels balances and by extension prices.

Mounting war-induced refinery outages from the Middle East to Russia have in July added to the fuels supply tightness, catapulting product cracks, which have been on a steady rise since the start of the supply disruption in early March, to new heights. The 3:2:1 crack spread vs WTI rocketed past the 2022 Ukraine invasion record, peaking at $72.22 bbl.

Chevron Q2 Profit Up Almost 5-Fold Y-o-Y On High Prices

Chevron reported on Friday (07/31) that second-quarter net earnings surged nearly fivefold year-over-year to $12.1 billion, buoyed by higher oil prices, strong U.S. refinery throughput, and legacy Hess assets.

Chevron also reported that:

Quarterly net earnings of $12.1 billion compare with $2.21 billion in the first quarter of 2026 and $2.49 billion in the year-ago quarter.
Adjusted earnings reached almost $12.0 billion in the second quarter compared with $2.79 billion in the prior quarter and $3.05 billion in the second quarter of 2025.
Upstream earnings climbed to $8.18 billion in the latest quarter, up from $3.91 billion in the three months prior and $2.73 billion a year ago, boosted by higher realizations and volume expansion.
Downstream earnings rebounded to $4.87 billion from a $817 million loss in the first quarter, driven by record U.S. crude unit throughput and 97% refinery utilization.
Worldwide net oil-equivalent production averaged 4.07 million bpd, up 20% year-over-year, supported by integration of Hess assets alongside growth in the Permian Basin and Gulf of Mexico.

Average Brent spot prices reached $104 bbl in the second quarter, up from $81 bbl in the first quarter of 2026 and $68 bbl in the second quarter of 2025.

Exxon Q2 Profit Doubles Y-o-Y to $14.5B On Solid Execution

ExxonMobil reported on Friday (07/31) that net profit rebounded sharply in the second quarter of 2026 to $14.5 billion. The strong quarterly performance was supported by record Permian Basin production and robust refining utilization despite ongoing Middle East market disruptions.

ExxonMobil also stated that:

Net profit of $14.5 billion compares with $4.2 billion in the first quarter of 2026 and $7.1 billion in the year-ago period.
Adjusted earnings reached $14.7 billion in the second quarter when excluding identified items, up from $8.8 billion in the prior quarter.
Upstream earnings climbed to $7.9 billion due to higher reliability and the absence of operational disruptions previously seen in Kazakhstan.
Energy Products segment earnings swung to $5.5 billion from a $1.3 billion loss in the first quarter, driven by record diesel production.
Net oil-equivalent production averaged 4.5 million bpd, powered by record Permian output of more than 1.8 million bpd.

Total energy products sales reached 5.7 million bpd in the second quarter versus 5.6 million bpd in the previous quarter. Chemical products sales totaled 4.5 million metric tons compared with 5.4 million metric tons in the first quarter.