President Trump. Photo: The Washington Post / Contributor
President Trump will direct the Energy Department to buy oil for the nation’s strategic stockpile to boost prices and help the oil industry reeling after the market’s historic collapse this week.
The big picture: America’s Strategic Petroleum Reserve was created in the 1970s to ensure the U.S. has oil in case of an emergency. Today, Trump is buying oil for the reserve because of an emergency.
Between the lines: Global oil markets are facing an unprecedented double whammy of too much oil and too little demand, the latter exacerbated by the coronavirus. The industry was tanking before the pandemic, and now this health crisis has accentuated all of the sector’s woes.
Flashback: Congress had been selling oil from the SPR in recent years, given it wanted money and we're awash in oil that lessened our sense of energy insecurity.
The intrigue: The historic drop in oil prices is leading to rock-bottom gasoline prices, which is good for drivers venturing out amid the coronavirus crisis.
What we’re hearing: The oil market’s response has been “appropriate restrained,” according to Ed Crooks, a Wood Mackenzie analyst and former Financial Times reporter. Global oil prices are up about 5% on the day.