President Donald Trump said that the U.S. will “get our energy business back,” as he met with oil executives from at least seven companies amid the ongoing collapse in oil prices.
“We’ll work this out and we’ll get our energy business back. I’m with you 1,000%. It’s a great business, it’s a very vital business,” he said. Trump added that he’s “looking very seriously” at an infrastructure package.
Trump again reiterated that Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin want to make a deal on oil production.
“President Putin and the Crown Prince want something to happen badly. Certainly terrible for them what’s happening too, so they want to see something happen and I’ve spoken to both of them,” he said.
On Thursday, Trump told CNBC’s Joe Kernen in a phone conversation that he was expecting a production cut of up to 15 million barrels to be announced.
U.S. West Texas Intermediate crude jumped nearly 12% on Friday after OPEC said it would hold a virtual meeting on Monday to discuss oil policy, while Russian President Vladimir Putin said a production cut of 10 million barrels per day is possible if global players participate, according to a report from Reuters.
Secretary of Energy Dan Brouillette said that the U.S. is still planning to buy oil for the Strategic Petroleum Reserve. Previously, the Department of Energy has said it was suspending its oil purchase program after the requested $3 billion in funding for the project was left out of the $2 trillion stimulus package.
On Thursday, the DoE said it was planning to make 30 million barrels of oil storage capacity immediately available to U.S. oil producers.
Some analysts say that in order for production cuts to take place the U.S. will have to participate in some form, and U.S. producers are divided over what type of action should be taken.
Earlier in the week independent producers Pioneer Natural and Parsley Energy asked the Texas Railroad Commission, the state’s oil regulatory body, to curb production. But the American Petroleum Institute has opposed it, and in a letter to the president on Wednesday said gains made by the industry would be jeopardized by efforts to restrict supply.
Texas Railroad Commissioner Ryan Sitton said that he had spoken to Russian energy minister Alexander Novak, and that the state would potentially agree to curb production in an effort to prop up prices.
“This will be part of a singular deal. We’re following the President’s lead on this … If this is part of that international agreement, in light of the fact that we are in arguably the worst economic pandemic in mankind’s history, then we will participate in extraordinary measures due to those extraordinary circumstances,” Sitton said Friday on CNBC’s “The Exchange.”
WTI just posted its best week on record, but prices are still down more than 50% this year as the coronavirus has caused unprecedented demand destruction, just as a price war between Russia and Saudi Arabia broke out.
A barrel of U.S. oil now trades at $28.34. At the beginning of the fear, it fetched more than $60.
“I think what you’re seeing here is that no one is benefiting from prices at this level,” API president and CEO Mike Sommers said Friday on CNBC’s “Squawk Box.”
“The Saudis aren’t benefiting, the Russians aren’t benefiting. So, I think what you’re seeing here is people acting within their common interests that we have to get the markets rebalanced and the best way to do it is for production to come down in the short-term. But I think the key point here is that, you know, American producers, we’re not operating within a dictatorship,” he added.
– CNBC’s Patti Domm contributed reporting.