With oil prices cratering worldwide, President Trump added an extra order to his list of executive responses to the coronavirus pandemic: buy up crude oil and fill the US’ reserves to the brim.
“Based on the prices of oil, I’ve also instructed the secretary of energy to purchase, at a very good price, large quantities of crude oil for storage in the US strategic reserve,” Trump told reporters at the White House. “We’re going to fill it right up to the top.”
Trump’s order will see the US snap up a bargain, as crude oil prices have just suffered their worst week since 2008, dropping to around $30 per barrel. The drop was caused by reduced demand due to the coronavirus panic, and an ongoing price war between Russia and Saudi Arabia, neither of whom have cut output to match the reduced demand.
By stocking up the reserves, Trump can protect US energy companies from potential coronavirus-related disruptions to supply, or release more oil to insulate the market against price shocks once demand rebounds.
The decision to “fill it right to the top” comes after a group of oil lobbyists met with the president on Wednesday, urging him to capitalize on the downturn and snap up cheap crude oil during the dip.
The president did not say exactly how many barrels would be bought, but according to Reuters, the strategic reserve currently has the capacity to store an additional 77 million barrels, on top of the 635 million currently held in storage in Texas and Louisiana.
Though one line in a lengthy press conference, Trump’s announcement immediately caused oil prices to pitch upwards again.
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