Oil Price Drop: Trump Asks For Help From Energy Department, Treasury To Save Industry

President Trump said Tuesday he has ordered his administration to save the domestic gas and oil industry amid crashing oil prices and a supply glut as a result of the coronavirus pandemic.

“We will never let the great U.S. oil and gas industry down,” Trump said, to make sure the jobs will be there once the crisis is over. Trump said he instructed Energy Secretary Dan Brouillette and Treasury Secretary Steven Mnuchin to develop a plan for keeping U.S. energy companies viable.

The move came as the May crude oil futures contract on the New York Mercantile Exchange plunged into negative territory Monday, settling at minus $37.63. On Tuesday, just ahead of its expiration, it was trading at about $8. June was trading near $12, down more than 40% from Monday’s close.

The U.S. shale oil industry needs $40 a barrel to break even. Many of the smaller companies were believed on the brink of bankruptcy as a result of the price crash.

Brouillette told Fox News he planned to talk with House leaders Tuesday about funding to fill the 77 million gallons of remaining space in the U.S. Strategic Petroleum Reserve, but Democrats have opposed bailing out the oil industry.

The Department of Energy last week said it was negotiating with the oil companies to provide storage for 23 million gallons of oil to help relieve ease the lack of storage space exacerbated by the coronavirus pandemic, overproduction by the OPEC+, and the production and price war between Saudi Arabia and Russia.

The U.S. strategic reserve is held in the salt caverns in Texas and Louisiana. It currently holds 635 million barrels – what the U.S. typically used in four days in 2019.

Politico reported a handful of companies have asked for federal help, but the White House was resistant ahead of OPEC’s decision to cut production by 10%.

The American Petroleum Institute said the industry is not looking for a bailout.