US President Donald Trump has directed his administration to figure on an idea to urge funding to the oil and gas industries as a steep sell-off in oil futures continued.
"We will never let the great US Oil & Gas Industry down," Trump tweeted on Tuesday morning, Xinhua reported.
"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!" Trump said.
At a White House press briefing on Monday, Trump said that the US was "looking to" add as much as 75 million barrels of oil to its Strategic Petroleum Reserve (SPR) "based on the record low price of oil".
US Energy Secretary Dan Brouillette told Bloomberg on Tuesday that the United States government is taking "aggressive and appropriate steps" to assist the refining industry during the pandemic, and he's eyeing the Federal Reserve's Main Street lending program to assist oil companies.
Fuelled by pandemic-related demand shock and oversupply fears, the soon-to-expire May contract for US oil futures prices crashed to the negative territory for the first time in history on Monday.
The West Texas Intermediate (WTI) for May delivery shed $55.9, or over 305 per cent, to settle at -37.63 USD a barrel on the NY Mercantile Exchange, implying that producers would pay buyers to require oil off their hands.
The May contract managed to show positive as of midday Tuesday. However, the most-active June contract for the US benchmark plunged quite 30 per cent to settle around $11.57 dollars a barrel.
The oil and gas industries have seen a historic sell-off amid the coronavirus pandemic. Almost 40 per cent folks oil and gas producers face insolvency within the year if crude prices remain near $30 a barrel, consistent with a recent survey by the Federal Reserve System Bank of Kansas City.
"Expectations for future activity also fell to their lowest level since late 2014, as most firms do not expect energy prices to return to profitable levels this year," said Chad Wilkerson, an economist at the Federal Reserve Bank of Kansas City.