US refining lobby group urges Trump against oil market ‘meddling’ amid coronavirus
The United States’ main refining lobby group American Fuel & Petrochemical Manufacturers (AFPM) urged President Donald Trump in a letter on Wednesday against imposing any type of constraints on the oil market amid the coronavirus pandemic.
“Imposing supply constraints, such as quotas, tariffs, or bans on foreign crude oil would exacerbate this already difficult situation, jeopardize the short and long-term competitiveness of our refining sector world-wide, and could jeopardize the benefits Americans experience as a result of our increasing energy dominance,” said AFPM President and CEO Chet Thompson and American Petroleum Institute (API) CEO Mike Sommers in the letter.
“Long-term, we know the U.S. refining sector is strong and will remain the most competitive in the world, but right now our sectors are facing headwinds that should not be made worse.”
AFPM says that many refiners have announced reductions in output of 25 percent or more due to decreased demand related to COVID-19.
US energy companies are losing money on oil production, cutting tens of thousands of workers, and some are struggling to obtain financing. Texas shale producers have been hurt the most as oil prices have crashed two-thirds this year. Last month alone, prices fell by half, to near $20 a barrel, as the coronavirus slashed fuel demand.'
AFPM added that the issue is slated to be discussed at the White House on Friday, April 3.
On Thursday, Trump said he had brokered a deal between Russia and Saudi Arabia to cut output by 10 million to 15 million barrels per day.
He wrote in a tweet that he had spoken to Saudi Arabia’s Crown Prince Mohammed bin Salman, “who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!”
He followed this with another tweet stating: “Could be as high as 15 Million Barrels. Good (GREAT) news for everyone!”
Oil prices shot up by as much as 25 percent to above $25.00 in New York, having fallen by half in the last month.
The Kremlin later denied that Russian President Putin had been in contact with Saudi Arabia’s Crown Prince Mohammed bin Salman.
“No, there was no conversation,” Putin’s spokesman Dmitry Peskov told Interfax news agency, according to AFP.
Saudi Arabia has increased oil production to more than 12 million barrels per day since the collapse in the OPEC+ deal with Russia on March 5 in Vienna.