Trump says US will offer oil, gas sector relief from market collapse

Washington — Oil futures appeared to shrug off President Donald Trump's promise Tuesday to develop a financial rescue package for oil and gas producers after Monday's staggering selloff amid plunging demand and dwindling storage options.

"We will never let the great U.S. Oil & Gas Industry down," Trump said on Twitter. "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!"

A lack of US oil storage capacity led Monday to the front-month NYMEX WTI contract settling in negative territory at minus $37.63/b, down $55.90/b from Friday. The contract had never before traded in negative territory, and the previous record low front-month settlement was $10.42/b on March 31, 1986.

At 1400 GMT Tuesday, NYMEX May crude was trading at around $1.40/b, having bounced in overnight trade. The June contract was trading around $15.64/b. The May contract expires Tuesday.

Trump on Monday reiterated plans to fill the US Strategic Petroleum Reserve to take advantage of record-low oil prices, but he gave no new details on how the administration would buy the crude without approval from Congress.

He said oil prices were "at a level that's very interesting to a lot of people."

"We're looking to put as much as 75 million barrels into the reserves themselves, that would top it out," he said during the daily White House briefing. "That would be the first time in a long time it's been topped out. We'd get it for the right price."

Trump did not detail how the government would pay for the crude, after Democrats in March blocked the Department of Energy's plan to buy up to $3 billion of domestic oil to fill the stockpile as part of the latest economic stimulus package.

DOE has since shifted to renting space in the Gulf Coast storage caverns, saying last week that it was negotiating with nine US oil producers to store a total of 23 million barrels for delivery mostly in May and June. The SPR would still have about 55 million barrels of capacity, according to the latest inventory data.