Trump's reaction to free oil in the US: It's time to buy oil
US President Donald Trump, reacting to the country's negative oil prices, announced that now is the right time to buy oil. Trump said he plans to buy 75 million barrels of oil for the Strategic Petroleum Reserve.
In response to the country's negative oil prices, the US President said, "It's time for us to buy oil." He announced the purchase of 70 million barrels of oil.
US President Donald Trump, reacting to the country's negative oil prices, said at his daily press conference in Washington that his administration would seize the opportunity and buy up to 75 million barrels of cheap crude oil. Trump stressed that he would request the necessary funding from Congress for this purpose. He said, "It's a very good time to be buying oil."
According to the latest annual report in the United States, the country's strategic oil reserves reach 700 million barrels.
Continuing his speech, Trump assured that oil prices would soon return to $25 to $28 per barrel.
The US president blamed the fall in oil prices on the impact of trading in the financial market. The US oil futures contract for May expires on Tuesday, which is why many speculators sold oil at a loss.
The US President also announced that he may consider importing oil from Saudi Arabia to compensate for oil losses and support the shale oil drilling industry in the country.
Why did oil become free in America?
The price of US light crude for May delivery fell by 300% on Monday, May 1, compared to Friday, and at some points it fell to minus $37.
Negative prices for oil are an unprecedented phenomenon in history, meaning that American producers are not only prepared to deliver oil cargoes to customers for free, but also pay $37 per barrel to “reject” the cargoes to refining.
The current oil market event has surprised experts to the point that they are unable to analyze the situation.
Oil expert Reza Zandi wrote on his Twitter page: "Analyzing what is currently happening to the price of US light crude oil is not easy. Because something unprecedented has happened in history. Various factors also play a role in these historical moments. But do not doubt that it will have important economic and political consequences. Both in the short term and in the long term."
Oil analysts were reporting the moment-by-moment decline in the price of American light crude oil.
Trump's plan to prevent further crisis
The main reason for the fall in US light crude is the filling of oil storage tanks and the decline in demand. Oil storage at sea and on land continued in the past days as oil prices fell, but now the tanks are full and there is no more room for storage.
Some experts have stated that the United States could impose tariffs on oil imports to deal with the current oil price crash, and if this measure does not have any effect, Trump would be forced to pay the owners of shale drilling companies to end their production. Some experts believe that this action by Trump could be an effective lever to bring oil prices back to normal.
Source: DW
