Daily Comment (august 11, 2026). by patrick fearon-hernandez, CFA, and thomas wash. [Posted: 9:30 AM ET] | PDF Its Comment today opens with a short update on the conflict in Iran. Confluence Investment Management LLC next review several other international and US developments that could affect the financial markets today, including growing economic disruptions in Germany due to Europe's recent heatwaves and drought and another big artificial intelligence funding deal that will likely further raise concerns about circular financial deals in the sector. United States-Israel-Iran: Global oil prices jumped more than 3% earlier today on the news of fresh Iranian demands on the US and new attacks on shipping in the Strait of Hormuz, which Confluence Investment Management LLC described in its Comment yesterday. However, prices have since retreated and are now up only slightly, with near Brent futures prices essentially flat at $87.75 per barrel. Germany: In an emergency move to soften the trade disruption caused by historically low water levels on the Rhine River, several German states have suspended their bans on Sunday trucking. Meanwhile, shipping rates have surged. As parts of Europe face their fifth heat wave of the year in the coming days, some officials fear the Rhine will get so low that it will be unnavigable along its entire length, shutting in much of Germany's industrial economy. Chile: The Chilean government yesterday said it will allow state-owned copper giant Codelco to retain 100% of its profits this year, up from about 30% in recent years. The move aims to help Codelco handle its enormous debt burden, which has grown along with the firm's massive capital investments to keep up production levels. The firm's investment program is seen as vital to solving a massive projected shortfall in global copper production by 2040, even as electrification and data centers boost the demand for electricity. Japan: In foreign exchange markets yesterday, the yen depreciated about 1% to more than 159 JPY per dollar, reversing about half its appreciation after the joint US-Japan intervention on July 31. The currency is trading roughly flat so far this morning, but the renewed depreciation is raising concern that it will continue to lose value until the Federal Reserve agrees to loosen its internal rules for currency operations, which may be necessary to increase the US's intervention firepower. Singapore: The city-state's statistical agency said second-quarter gross domestic product was up a strong 5.9% from the same period one year earlier, almost matching the increase in the year to the first quarter. In response, the Ministry of Trade and Investment raised its full-year growth outlook to a range of 4.5% to 5.5%. The stronger-than-expected GDP growth reflects less disruption than expected in the global energy market because of the Iran war and stimulus from the global AI boom. China: The People's Bank of China last night appointed German financial giant Deutsche Bank to be its first European clearing house for renminbi as it seeks to increase international usage of the currency. Deutsche will be the first non-Chinese bank in Europe to be allowed to clear and settle renminbi transactions, along with the local branches of China's major state-owned banks. That should give Deutsche an improved ability to facilitate trade, treasury, and investment activity between Europe and China, despite the growing threat of new bilateral trade barriers. United States-China: An analysis posted yesterday said Chinese artificial-intelligence developers still prefer to train their large language models on processors from US chip giant Nvidia, despite Beijing's pressure for them to use China's own rapidly improving chips. According to the report, the main hurdle is that shifting to Chinese chips requires difficult engineering and software changes. * As a result, the US government still likely has geopolitical leverage over China to the extent that it's willing to keep or tighten its current restrictions on exporting Nvidia chips. * Of course, that means Nvidia and other US tech firms are still at risk of sudden trade restrictions that could adversely affect their businesses. US Artificial Intelligence Industry: AI processor giant Nvidia late yesterday confirmed it is partnering with investment firms Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to assemble more than $500 billion in loans at "attractive rates" for "the build-out of AI infrastructure over time." The announcement is likely to rekindle concerns about circular financing deals in the AI space, which could lead to financial contagion if a major firm related to AI runs into problems. A key source of such problems could be a competitive threat from China. US Energy Industry: Refiner Phillips 66 and two partners, including refiner HF Sinclair and pipeline operator Kinder Morgan, today said they have agreed to build a 900-mile pipeline to carry gasoline, jet fuel and diesel from the Texas Panhandle to Arizona and California. With a capacity of 230,000 barrels per day, the pipeline aims to help bring down California's sky-high fuel prices, which in part reflect its loss of petroleum imports and refineries over the years.

Phillips 66, Kinder Morgan, HF Sinclair approve Western Gateway Pipeline project. August 11, 2026 EnergyNow Media By Reuters (Reuters) - Phillips 66, Kinder Morgan and HF Sinclair said on Tuesday they have finalized a joint venture agreement and decided to proceed with the proposed $5 billion Western Gateway Pipeline system. Phillips 66 will own 49.9% of the joint venture, Kinder Morgan 35.1% and HF Sinclair 15%, they added. Companies have been racing to build a major new fuel pipeline to the U.S. West Coast ahead of planned refinery closures in California, a relatively isolated fuel market with limited pipeline links to major refining hubs that leave it vulnerable to supply disruptions and price spikes. The project is expected to be completed in 2029. Reporting by Pooja Menon in Bengaluru; Editing by Jonathan Ananda Share This:

Phillips 66 net profit rises 339% to $3.8bn in Q2 2026. Phillips 66 attributed its Q2 results to improved margins and operational performance across refining, midstream, chemicals and marketing. Phillips 66 has reported net earnings of $3.8bn for the second quarter of 2026 (Q2 2026), an increase of 339% from $877m in the same period of the previous year. The US-based petroleum refineries company's diluted earnings per share for the quarter ended 30 June 2026 rose by 344% year-over-year (YoY) to $9.55 from $2.15. Phillips 66 reported sales of $51bn in Q2 2026, an increase of 53% from $33.3bn in the corresponding quarter of the previous year. The company's revenue rose by 55% to $52bn from $33.5bn in the prior-year period. Phillips 66 said higher margins and improved operations drove its Q2 results. The company's refining performance was supported by higher margins and improved crack spreads. Midstream business benefitted from stronger margins and volumes. Chemicals results improved on higher polyethylene prices, while Marketing and Specialties saw increased global marketing margins, the company said. Adjusted net earnings for the quarter were $3.8bn, up 289% from $973m in the prior-year period. Adjusted diluted earnings per share rose by 295% to $9.41 from $2.38. Phillips 66's adjusted earnings before interest, taxes, depreciation and amortisation reached $5.9bn, increasing 136% from $2.5bn a year earlier. Cash flow from operations increased to $7.3bn, compared with $845m in Q2 2025. Cash flow from operations excluding working capital was $4.3bn, up from $1.9bn. Capital expenditures and investments amounted to $726m, up 24% from $587m in the prior-year period. Phillips 66 returned $887m to shareholders in the quarter, versus $906m a year earlier, including $379m in share repurchases and $508m in dividends paid. Total debt as of 30 June 2026 was $20.6bn, down from $20.9bn at the end of the same period last year. Net debt decreased to $16.5bn from the Q2 2025 figure of $20.9bn. The company's debt-to-capital ratio improved to 39% from 42%, while the net debt-to-capital ratio decreased to 33% from 41%. Cash and cash equivalents stood at $4.1bn, compared with $1.1bn a year previously. Phillips 66 reported record natural gas liquids fractionation and liquefied petroleum gas export volumes. Refining utilisation for the quarter was 96%, with a clean product yield of 86%, compared with 98% and 86%, respectively, in the prior-year period. During the reported quarter, Phillips 66 achieved full production at its Dos Picos II gas plant in the Permian Basin. The company also announced new projects including the Zeus Gas Plant and Coastal Bend NGL Fractionator. Phillips 66 said that it completed scheduled maintenance at both its Wood River and Humber refineries in Q2 2026. Major chemical joint ventures such as the Golden Triangle Polymers Project in Texas and the Ras Laffan Polymers Project in Qatar remain on schedule for full operations in 2027, the company said. Phillips 66 chairman and CEO Mark Lashier said: "Second quarter results reflect the strength of its operations and value of its integrated portfolio. Offshore Technology remain committed to its strategic priorities and continuous improvement. "Its focus on operating excellence, coupled with its commercial footprint, enables Offshore Technology to reliably supply energy products across the US and to global consumers. Its capital allocation framework is an integral component of the investment opportunity of Phillips 66. "We remain committed to creating value for our stakeholders through disciplined capital investment, dividends, share repurchases and debt reduction." Give your business an edge with its leading industry insights.