The battered U.S. oil market may have just received a lifeline from President Trump after crude prices posted the worst week since 2008 hugging the $31 per barrel level, down 48 percent so far this year.
“Based on the price of oil I have also instructed the Secretary of Energy to purchase, at a very good price, for large quantities of crude oil for storage in the U.S. Strategic Reserve, we are going to fill it right up to the top, saving the American taxpayer billions and billions of dollars and helping our oil industry,” Trump stated on Friday.
The move, according to Phil Flynn of The PRICE Futures Group, should boost oil prices from historic lows.
“This could send prices back into the $40s if the buyers are there,” said Flynn, who is also a FOX Business contributor, when reached for his reaction. “They [the U.S.] can buy oil at the lowest price in years,” he added.
The Strategic Petroleum Reserve is the world’s largest supply of emergency crude oil, as described by the DOE, and was established as a backup facility to protect the U.S. in the event of market disruptions or potential shortages.
The oil market hit a sharp downward spiral on Monday, with prices falling over 30 percent, as Saudi Arabia and Russia engaged in a price war, flooding the market with product.
“They’re taking advantage of this coronavirus pandemic that’s sweeping the world to focus in on this industry and devastate it,” Hamm, founder, and executive chairman at Oklahoma City-based Continental Resources Inc., said during an interview on FOX Business’ “Cavuto Coast to Coast” on Wednesday. "That's not gonna happen. We're gonna take action on them. We're gonna investigate that."
He said the Domestic Energy Producers Alliance has taken action to pass a resolution and start an anti-dumping investigation into Saudi Arabia, Russia and possibly other countries.
Treasury Secretary Steven Mnuchin also put Russia on notice, speaking to Ambassador of the Russian Federation to the United States Anatoly Antonov in which he “emphasized the importance of orderly energy markets,” according to a statement following the heavy selling.