Morning Brew Daily - Oil Prices Rise On Saudi Cuts & 'Barbie' Movie Global Pink Shortage

Episode Date: June 5, 2023

Episode 74: Neal and Toby explain why Saudi Arabia is cutting 1 million barrels of oil a day in a deal with OPEC and what it could mean for gas prices for this summer travel season. They delve into a Hollywood business news roundup from the weekend; including a new deal between directors and and studios and Christopher Nolan's case for seeing 'Oppenheimer' in IMAX. Plus the 'Barbie' movie was so pink, it caused an international paint shortage. Finally who were the winners of the weekend and what can we watch for this week. Learn more about Brex: brex.com/morningbrew Learn more about our sponsor, Fidelity: https://fidelity.com/stocksbytheslice Listen Here: https://link.chtbl.com/MBD Watch Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. I am Neil Fryman. And I'm Toby Howell. On today's podcast, we will tell the tragic tale of the robot pizza-making unicorn that went bust. And the production of the Barbie movie caused a global shortage of, well, we'll tell you what later. This is the podcast version of clickbait. Then we'll talk about OPEC and how Saudi Arabia is doing its best to prop up the price of oil before we break down some high-powered Hollywood beef between Tom Cruise and Christopher Nolan. Neil, it's Monday, June 5th.

Let's ride. All right. I hope everyone had a good weekend. This never happened to me, but I slept really funny. And I woke up and my back was just in a lot of pain. And I couldn't move. Neil, as long as you're sleeping, I'm happy. Okay.

Oh, I was sleeping, but it just reminded me that, you know, I'm not super young anymore. And I was like, oh, my God, what is going on? I'm so creaky. This week, did you know, is National Dog Bite Awareness Week? I can't say I did know this. All right, so it's a PR campaign by the U.S. Postal Service to raise awareness around dogs attacking mail carriers. Because while people tend to joke about it, this does seem like an actual problem. The U.S.PS said that dogs attacked more than 5,300 of its employees while delivering the mail last year.

Houston was the top city for dog attacks, followed by L.A., Dallas, and Cleveland. This is so sad to me because both parties involved are just trying to do their job. The mail people are just trying to deliver the mail, and the dogs are just trying to protect their home terms. so I feel for both of them, but that's a much higher number than I expected, 5,300. Okay, let's get into our first story of the day. Over the weekend, Saudi Arabia, unilaterally decided to reduce the amount of oil it sends to the rest of the world by one million barrels per day. Now, the goal is to prop up the price of oil a bit, which has been sagging over the last few months.

This announcement comes as OPEC Plus, which is that consortium of oil-producing nations that account for right around 40% of the world's oil production decided to extend previously agreed upon cuts through to next year. So we're seeing all these cuts to oil supply with the goal being to reduce the supply out there, which, as you know, causes demand to potentially go up. That's prices. Prices to go up.

That's the one microeconomics class I took in college coming in handy right there. So overall, the two biggest takeaways from this announcement are one, Saudi Arabia, is willing to act unilaterally to stabilize the price of oil, which is not the best look for the rest of OPEC because it doesn't really present a unified front. And then two, we're still in a pretty weak overall market for oil because demand in the three biggest oil consumers, China, the EU and the U.S. is still relatively soft.

So, Neil, this is our first time really talking about the energy markets on the show. Anything about these Saudi cuts that kind of stood out to you? It's just wild that these countries get together in Vienna every so often, and they just kind of huddle up, and they come out with these announcements that make huge differences to the price of oil globally. I mean, you said it was a consortium, but also it's kind of a cartel because they can, they can, you know, work together to manipulate the price of oil, which is what a cartel can do. Because they all kind of, they control, yeah, 40%. The U.S. has been growing its oil and energy output to kind of counter. balance that and so we can also impact the price of oil. The U.S. never likes it when the Saudis or OPEC cuts their production because it leads to higher gas prices for us and people, you know,

Americans driving around. This doesn't seem like it's going to be a huge deal for that. It kind of sets a floor of where oil prices could go. So I wouldn't expect, you know, definitely don't expect gas prices to go down from where they are now, but analysts don't really expect it to be a significant bump in gas prices because it's kind of a minor cut and it could not be extended in the future. Yeah. And just to give a brief history of like how we got here of recent history, in October, OPEC slashed output by two million barrels.

And then again in April, Saudi Arabia and Russia worked together to add another 1.6 million barrel cut, which actually really made the U.S. mad because at that time, inflation was a really big deal. I mean, it's still a really big deal. But the White House kind of chastised OPEC for doing these cuts, saying basically that Russia was just trying to maximize their profits to fund the Ukrainian war. It's wild how many things like oil prices touch because it's so widespread. Especially for the Saudis, they want to get away from oil, but to do, and by investing in technology and sports, which we can get to. But they need oil money to fund all of that. And they need oil to be at a particular threshold price that they can balance their budget and fund all of these activities.

So this threshold price for Saudi Arabia is $80 a barrel and we're still below that. So they need to get that back up so they can fund all of these crazy initiatives that they have. There's this $500 billion mega city in the desert. Remember this called Nome? The line. It's like a big line and it's going to cost them $500 billion that they need oil revenue for. Then we also know that they are backing this live golf series and they're paying golfers more than $100 million, not even to play, just to come over from the PGA tour.

And now, perhaps the most timely thing is that they're on this mission to become like this global soccer powerhouse. They got Ronaldo last year paying him $200 million a year. They just signed Kareem Benzima, who, if people haven't heard, is one of the best players on the planet. And they're paying him $250 million a year. And the crown jewel of this, you know, soccer, you know, sports washing thing that they're doing doing with golf is

Lino Messi, who may end up there. He's already a brand ambassador for their tourism industry. Yeah. Please no, Messi. Come to enter Miami. Stay in the U.S. Give the MLS some of your talent. So, yeah, it is crazy. Yeah, they need that $81

a barrel price. And right now, oil is right around 77 after the latest price cuts. So it's still below. So they're definitely sweating a little bit. So we might see some more cuts going forward. All right. Let's move on to

There was a lot of news out of Hollywood yesterday. So Toby and I are just going to run down some of the biggest stories that came out of our wonderful TV and film industry. The first of that is, so most people know that there's this big Hollywood writer strike right now. There are more than 11,000 TV and film writers not working in protest of what they say is an existential threat to their profession due to the shift to streaming. But you may not know that there were negotiations going on with two other groups of wealth. that you need to make a movie. The directors and the actors. Well, one of those disputes was resolved yesterday.

The directors union and Hollywood Studios reached a tentative contract for the next three years that the directors seem pretty pumped about. They're getting a pay bump of 5% next year and 4% the year after that. There was a provision for AI where it said they confirmed that generative AI is not a person. Good to know. And that it cannot replace guild members' duties. And then there was also this provision for gun. safety after the death of that cinematographer who was working with Alec Baldwin on the

Russ set in 2021. They're now banning live ammunition from all sets. So it looks like this is one labor dispute down, two to go. And the actors have until 5 p.m. Pacific today to decide whether they're going to authorize a strike of their own. Both of the unions, the writers and the actors said that this director's agreement had no bearing on their own negotiations. Yeah, but hopefully it's like a template and it provides kind of, yeah, a template for how their disputes could get resolved as well. But yeah, good on the directors. There's so many of them, 19,000 in this union. So, okay, let's move on to the box office now. Spider-Man across the Spider-Verse, which is the sequel to the animated version of Spider-Man that came out in 2018, absolutely dominated the box

office this weekend. It pulled in $120.5 million at the domestic office, which is second to only the Super Mario Bros movie for the biggest debut this year. What's even crazier is the first movie, which won an Oscar for Best Animated Film. So good. Only made, it's so good. $35 million in its first three days. So this second movie is on pace to be almost three times as big.

I'm 100% going to go see this movie. Box office is not dead. Right. No. I think we're, what are we down? Like 20, we're down 22% below pre-pandemic levels so far through 2023.

You know, it's like slowly inching up that we're crushing last year's levels. We're up 28% over the same period in 2022. Yeah. And then one detail from these box office numbers is that a big driver of sales was the fact that 29% of people who saw the film saw it in a premium format, which averages $4.52 more per ticket. And honestly, I'm bringing that up to as a segue into our next point in our Hollywood Roundup, which is Christopher Nolan, the director of the upcoming movie Oppenheimer,

is going on an absolute press tour de force right now to promote this movie that I can basically boil down to IMAX freaking rocks and is the only way you should go and watch my movies. So he did this exclusive interview with AP where he said the best way to view his movies was on a 52 by 72 foot IMAX screen in the middle seat, but actually a few rows back from where you would typically watch a normal movie. and iMac is certainly happy for the free press even though it doesn't even really need it iMacs corp which

operates the iMac cedars solids revenues in this year's first quarter exceed the same period in 2019 which is crazy because we were just comparing overall box office revenues um yeah and combsc score predicts that iMac cedars will bring in nearly 17% of domestic movie revenue this year up from nine point two percent in 2019 so yeah iMac's movies so hot And Nolan loves IMAX. I've never seen someone like something this much. He shoots, I think he shot all of his movies since the Dark Night on IMAX, which came out in 2008. And apparently the film for the prints for Oppenheimer, which is about the development of the nuclear bomb in 1945, it spans over 11 miles of film stock and weighs 600 pounds.

Crazy. He does love his, his IMAX film. And then one final detail while we're talking about I. I-Pax, IMAX, the seventh Mission Impossible movie called Dead Reckoning Part 1, opens on July 12th, and it has most of the IMAX screens booked on that date until July 21st when Oppenheimer comes out. And Tom Cruise is so mad about this because he's getting booted from all the IMAX series by Nolan.

So he's complaining loudly to Paramount executives, and he's also, apparently, this is the quote, out for blood about it. You never want Tom Cruise out for your blood. I thought Tom Cruise ran Hollywood, but apparently IMAX. loves Christopher Nolan even more. This is probably a bad move by IMAX because I think Mission Impossible is going to make more money than Oppenheimer.

Yeah, but I don't know. You said earlier, you were on Tom Cruise. Well, I was on his side because he did that stunt where he drives the motorcycle off the cliff and he's probably thinking, are you kidding me? I literally risked my life for this and now I'm getting booted by Oppenheimer. This is just bad planning.

These are two of the biggest movies of the year and the fact that they're coincide. There's just an IMAX. I'm seeing both. They double book the IMAX eaters. Let's move on to our final movie story. Barbie is one of the most anticipated movies of this summer, very different. I don't think you have to see that one on IMAX, but it might be interesting.

It's starring Margot Robbie, Ryan Goslings, directed by Greta Gerwig, a huge movie. In a recent interview, the production designer for Barbie said that they were so committed to making everything pink, props, sets, clothes, anything else in the movie frame, that the world ran out of pink. And the company that makes the shade of pink, paint, it's named Roscoe, they confirmed to the L.A. Times that Barbie movie did clean us out of paint. There was the shortage that they already had. And then we gave them everything they could. I think it's a brilliant marketing ploy because, yeah, the fine print is that this company was already suffering paint shortages after actually a deep freeze in Texas.

Remember that crazy Texas storm? Damaged paint materials. So it had that shortage. And then also, they were still feeling shortages from the COVID-19 pandemic. So even though the headline is Barbie makes the world run out of pink paint, the world was already a little low on pink paint.

Don't tell me that. Let me just believe that Barbie movie caused a global shortage of paint. All right. Lots of movies to go see. I'm really excited, actually. I'm a big movie going these days. All right.

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which stands for the soccer tournament this weekend down in north carolina so what is this tournament and why is it worth a million dollars well the backstory comes from a company called tbt enterprises which have run one a one million dollar basketball tournament the last few years basically the tbt the basketball tournament pits wash up low level pros former college players and other really good amateurs against each other in this march madness style tournament and a couple of former college soccer players were watching the TBT and said, wait a second, this would totally work for soccer. So they teamed up with the company behind the basketball tournament to launch the TST. This tournament attracted all kinds of really big names. There was Cess Fabergass used to play for

Barcelona. Chad Ocho Cinco was there. Rexum, the team that Rob McElany and Ryan Reynolds owns fielded a team. Steve Nash was there. The U.S. Women's National Team fielded a team of former players. It was kind of the who's who of big soccer names. And overall, it was just a very cool approach to amateur sports that was honestly really entertaining and captured a fair amount of fan interest as well. Speaking of washed up players, when are you playing? I know. Okay, so this is my anecdote, is when the news came out, immediately in all the group chat,

saying, should we fund a team, should we enter? It cost $25 grand to enter. So we would have had to raise somebody. It's like a big high stakes table in Vegas. I know. And it's winner take all, too. So it's $1 million or bus. Was it televised?

It was televised. Peacock and NBC Sports showed some of the rounds, some of the major matchups. And then my final anecdote on this story, which maybe is why I chose it as the winner of the weekend, is actually ran into Steve Nash on Saturday playing in my own soccer league in New York. He plays in the same league, subtle flex there. And I was just like, Steve, how did the tournament go? And they played Rexum and lost three, two. And he gave me kind of a breakdown of how the game went.

So that was why the TST is my. overall one in the weekend. Because Toby wanted to tell everyone that he's friends with Steve Nash. Steve, I'm listening. Who is a NBA legend and former coach. Yeah. All right, let's move on to my winner, which is just the human race. Because there is yet another industry in which robots can't just get rid of us just yet.

And it is making Zah. Zoom was a robot pizza making company that just went belly up and has ceased operating, according to the information. This company wanted to automate the entire. pizza-making process by cutting humans out of the equation and having machines do everything. But this wasn't just any robot pizza-making company. It was, it raised $450 million in venture capital, including $375 million from SoftBank. And if you hadn't heard of SoftBank, it's this Japanese conglomerate led by this very interesting, I mean, I guess that's generous, a guy named Masayoshi-San.

and at the height of the startup boom in 27, 2018, he was throwing billions to any founder with a hustle culture mindset who could tell a good story. Think Adam Newman of WeWork. Zoom was also led by one, a former video game exec who said he wanted Zoom to be the Tesla of fresh food and the Amazon of fresh food.

Oh my God. But instead, Zoom became the quibby of fresh food. It suffered technical problems like, get this, melted cheese that kept sliding off of its pizzas while its trucks were moving, And eventually it pivoted in 2020 to become a packaging supplier to other food companies. That didn't work out either. So this is sort of, this story is very much a symbol of Silicon Valley excesses of, you know, the late 2010s and how venture capital companies were throwing literally hundreds of millions of dollars to very unprofitable, very experimental companies that were little risky.

RIP Zoom, man. I think the funniest part is at one point it had 496 employees, which, What are you working on? 496 employees on a robot pizza truck? They were like unloading all of the pallets. And, you know, they tried to automate the entire process, but apparently a lot of it was labor intensive. I don't know. I don't know.

I don't think this is the end of robots making food. I mean, sweet green just opened this fully automated, you know, location. But maybe this one was just like a little ahead of its time. All right. Our final segment for Mondays is we give you a preview of. what to expect for the week ahead. This is going to be a really crazy week, starting with today. Apple's hosting its big annual event called the Worldwide Developers Conference.

The big news out of there is that later today, it's expected to reveal its mixed reality headset and enter the Metaverse. That is its biggest hardware launch since the Apple Watch in 2014. So we're going to be really excited. I'm going to be glued to the screen later today to see what this thing looks like. Yeah, and by this time next month, we're going to be doing this headset in virtual reality. I can't wait. This podcast and virtual reality.

They're also going to release some software updates to iOS, or the new iOS 17 is coming out. Apparently, there's going to be a journaling app. That's like the big thing that everyone is expected. It's going to replace the notes app. The notes gets it done for me, so I'm excited for that. And everyone, and so everyone knows there's this, like, theme that Apple executives do at the end of this conference, which is called One More Thing. And Steve Jobs kind of patented over the past couple of.

decades where he would give the whole spiel and then at the end he would just be like oh and one more a thing and then he does this kind of not small product update so we should be uh kind of paying attention to what that is um what else is happening the new are there are more candidates entering the republican race for president you have former new jersey governor chris christi and former vice president mike pence entering the field which also includes uh former president trump he's the front runner, Ron DeSantis, Tim Scott, who is the governor or the senator from South Carolina and former South Carolina governor Nikki Haley. I have this trivia about Tim Scott.

Okay. He'd be the first blank president since Grover Cleveland in 1884 if elected. Billionaire? No. I don't know. It's taller than six foot? Bachelor. Oh, interesting.

Yeah. You need a lady. There was only two other presidents, Grover Cleveland and Jay. to be canon that we're unmarried and Tim Scott is. Interesting. Yeah. He's not going to win, but it's just a little interesting trivia fact to drop on your coworkers today.

Let's move on to sports. It's going to be a busy week in sports. We have the NHL and NBA finals. Manchester City is going for the treble in the Champions League title game on Saturday. Please interbeat them. I do not want that. But I think the most exciting sports this week is the men and women's world series. College World Series.

It's like blown up over the past few years, and it's like perfect for social, and you just love to see college athletes having fun, and it's like a really good product. Yeah, absolutely. It's so regional. Like any college sports just has great fans, so yeah, I'll be watching as well. All right. Finally, we have D. Tomorrow is the 79th anniversary of D-Day, and for anyone wanting to read up on that, I recommend

D-Day by Stephen Ambrose, which is this really kind of exhaustive and detailed, but still very compelling book at what happened and it's just kind of mind-blowing. So definitely pick out that book. Prince Harry is going to testify in this tabloid trial tomorrow, which is one of several battles he's waging against the press for digging up stories on him illegally, including allegedly hacking into his phone. Royals do not get up on the witness stand. So this is going to be a very historic event. The last royal to be to testify in court was in 1890. So would we have Prince Harry up there is going to be Absolutely chancy. I don't even consider him a Royal anymore. He's just a reality TV star at this point. All right. Well, either way, it'll be, it'll be very interesting to see what he says. And usually, you know, he's going to be cross-examined, like, very, very intensely. And then finally, the gang's back with a 16th season of It's Always Sunny in Philadelphia on Wednesday. What a run for the show that I have admittedly do not watch.

I can't, I can't wait for our 16th season of Morning Brew Daily. So we'll be right there. What a week, Neil. Thanks for running that time for everyone. You're welcome. That is my job. All right. That is our show. Hope everyone has a great Monday. Please write us in and say hi at Morning Brew Daily at MorningBrew.com. Huge shout out to our crew for making this happen. Emily Milliron is our editor and producer. Samantha Vellas and Raymond Lou are the associate producers. Good morning, Dan Bousa. Billy Minino is on audio. Hair and makeup is also on Tom Cruise's bad side. Devin Emery is our chief content officer and our show is a production of morning brew. Great show today, Neil.

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