U.S. President Donald Trump says his country is looking to add 75 million barrels of oil to its strategic reserve amid the collapse in oil prices.
He told a daily news confetence on Monday at the White House that the addition would “top out” the national petroleum reserve for the “first time in a long time.”
U.S. crude oil prices plummeted to their lowest levels ever, as contracts settled deep in negative territory for the first time, amid tight shortages in storage capacity with the collapse in demand because of the coronavirus.
West Texas Intermediate (WTI), the U.S. benchmark, settled for the day at negative 37 dollars a barrel for May deliveries, as contracts are set to expire on Tuesday.
The problem of physical delivery was weighing heavily, leading to a single day decline of more than 200 per cent.
The price moved back up somewhat, but was still in negative territory, as US stock markets headed to their close, with equities under pressure.
However, longer term WTI contracts were faring somewhat better, while still down on the day, signalling optimism that economic production will improve by the end of 2020, and indicating the storage space issue was acutely pushing down the immediate term price.
June contracts were at just over 20 dollars per barrel and deliveries for later in the year are priced even higher.
Brent crude was lower by about 8 per cent, and was trading at 25 dollars a barrel.
Oil prices have been hit by both the coronavirus bringing major economic sectors to a near standstill, and a price war between Russia and Saudi Arabia that kicked off at about the same time the pandemic was spreading.
Earlier this month, OPEC+ countries – an expanded format of the Organisation of the Petroleum Exporting Countries (OPEC) – agreed on a deal to cut production by 9.7 million barrels per day for May and June, but failed to support prices back to previous levels.