Washington, Mar 14: US President Donald Trump said during a press conference that he has directed the Secretary of Energy Dan Brouillette to buy large amount of oil to fill up the United States’ Strategic Petroleum Reserve (SPR).
“Based on the price of oil, I’ve also instructed the Secretary of Energy to purchase… large quantities of crude oil for storage in the US strategic reserve. We are going to fill it right up to the top. It puts us in a position that’s very strong, and we are buying it at the right price,” Trump said on Friday.
According to the Energy Information Administration, total crude oil held by the SPR as of the end of last week was 635 million barrels.
US crude oil prices settled up about 1 percent on Friday, while posting a 25 percent loss on the week, the worst weekly drop since December 2008, when the financial crisis was underway. However, after Trump spoke about plans to top up the SPR, US crude prices rose further in post-settlement trade, gaining more than 4 percent by 5:00 p.m. (21:00 GMT).
Oil prices crashed this week after Saudi Arabia moved to flood the market with crude oil after the collapse of talks to extend the OPEC+ production cuts pact.
The CME Group, which operates the NYMEX exchange where US crude futures trade, commented on Friday that there was no certainty on how long the crisis in oil would drag, given the resolve of Saudi Arabia to grab market share from Russia and US crude exporters.
The OPEC+ production cuts pact, in force since 2016, will expire on March 31. Both Saudi Arabia and Russia have said that the 23 oil producing countries under the alliance were free to produce as they liked once the pact expires.
(AGENCIES)
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