White House weighing aid for oil producers amid price collapse
Photo: Brendan Smialowski/AFP via Getty Images
The Trump administration is "strongly considering" federal assistance for U.S. oil producers facing distress due to the steep decline in prices, the Washington Post first reported and Axios has confirmed.
Why it matters: The twin forces of the novel coronavirus sapping demand and collapse of the OPEC-Russia production-limiting deal has created new jeopardy for companies, some of whom are already struggling financially.
- A number of analysts and industry officials are predicting that some companies will go bankrupt if there's a prolonged price trough.
- The White House did not immediately respond to a request for comment.
Where it stands: Prices for West Texas Intermediate have fallen from well over $60-per-barrel early this year to the $34 range Tuesday, having regained some ground since Monday.
- The decline has been sharp since Saudi Arabia and Russia failed Friday to agree to new production curbs, signaling a wave of new supplies are heading for the market.
Details: "The federal assistance is likely to take the form of low-interest government loans to the shale companies, whose lines of credit to major financial institutions have been choked off, three people said," the Post reports.