Trump Moves to Save Thousands of Jobs from Oil Company Crash: 'Make Funds Available'
President responds to subzero price in oil putting jobs at risk
President Donald Trump said he ordered his administration to "make funds available" to oil companies following the pile price crash, putting thousands of jobs at risk.
Oil prices dropped so rapidly making it impossible for US shale oil companies to make money.
US crude for May delivery turned negative, which has not happened since NYMEX oil futures began trading in 1983.
It was the oil market's worst day on record.
"We will never let the great U.S. Oil & Gas Industry down," Trump tweeted.
We will never let the great U.S. Oil & Gas Industry down. 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!— Donald J. Trump (@realDonaldTrump) April 21, 2020
"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!"
The President seemed to be reiterating previous requests he's made of Energy Secretary Dan Brouillette and Treasury Secretary Steven Mnuchin, who said the programs in the CARES Act is also open to oil companies, the Phase 3 coronavirus response bill.
Earlier his month, Mnuchin said that oil companies could apply for loans via unique lending facilities.
Mnuchin added he has "very limited ability to do direct loans out of the Treasury," which only distributes to airlines and national security companies.
But energy companies can apply for the Fed’s economy-wide lending program.
"Our expectation is the energy companies, like all our other companies, will be able to participate in broad-based facilities,” Mnuchin said.
Trump's tweet, however, signaled a shift in tone after he seemed resistant to pull new policy levers even as oil-state Republican senators pressed for action.
“Nobody has ever heard of negative oil before, but it's for a short term,” Trump said.
“So if you take a look at it, you'll see it's more of a financial thing than an oil situation.”
“The problem is nobody is driving the car anywhere in the world,” Trump said.
"Factories are closed, and businesses are closed.”
Analyst James Trafford of Fidelity International said of the crash:
"Yesterday's price action is best understood as a quirk or peculiarity of futures trading," according to BBC.
Trafford said the unprecedented price movement confirms that near-term demand is very weak.
"But it isn't cataclysmic," he said.
"We don't see negative oil prices as a new normal, going forward."
Meanwhile, Progressive Rep. Alexandria Ocasio-Cortez (D-NY) reacted with glee to the news of the oil crash.
In the now-deleted tweet, AOC said:
“You absolutely love to see it. This along with record low-interest rates means it’s the right time for a worker-led, mass investment in green infrastructure to save our planet. *cough*."
AOC has offered apologies for remarks, but later suggested the crash was an opportunity to push her Green New Deal:
“Now is the time to create millions of good jobs building out the infrastructure and clean energy necessary to save our planet for future generations. For our economy, our planet, and our future, we need a #GreenNewDeal.”