U.S. President Donald Trump said Tuesday that he had instructed the Cabinet to draw up a plan for recovery of the coronavirus-hit oil and gas sector after Monday's historic losses.
"We will never let the great U.S. Oil & Gas Industry down," Trump said on Twitter. "I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!"
Following the oil price crash, U.S. stocks on Tuesday came under renewed pressure and opened down.
The price of a barrel of West Texas Intermediate crude oil fell sharply Monday, diving into negative territory for the first time in history as demand continues to collapse on measures meant to keep individuals at home amid the pandemic.
The price for a barrel of oil under the futures contract, which expires Tuesday, fell as low as -$37.63 after opening at $17.73, a dip of more than -290%. That would seem to indicate that there is such a glut of supply relative to demand that suppliers would have to pay to unload their inventory.
International benchmark Brent crude also settled around $25.
In addition to global efforts that have kept people from leaving their homes, a since-ended feud between the Saudi-led Organization of the Petroleum Exporting Countries (OPEC) and Russia flooded international oil markets with excessive supply as producers have drawn down supply.
On April 12 the OPEC + mechanism reached a final agreement to cut their collective oil production by a record level of 10 million barrels per day (bpd) starting from May 1 to balance the oil market.
By Beyza Binnur Donmez