Frank Kane

DUBAI: US President Donald Trump vowed on Tuesday to save the US oil industry and OPEC producers held “virtual” crisis talks amid continued convulsions on global crude markets.

As OPEC leaders tried to chart a way forward, Saudi Arabia pledged every effort to restore stability. “The Kingdom continues to closely monitor the situation in the oil markets and is prepare to take any additional measures in cooperation with OPEC+ and other producers,” a spokesman said.

Oil markets endured another day of record-setting declines after Monday’s “wipeout” of American oil. Brent crude, the Middle East benchmark, plunged to as low as $17.50 a barrel, the lowest level for two decades, before recovering to about $24.

West Texas Intermediate, the American standard savaged by markets on Monday when it traded at a $40 negative price for May delivery, climbed back into positive territory at just over $10 a barrel. Worryingly for US producers, however, WTI for June delivery fell by 43 percent to $11.50 a barrel.

Sources in the Saudi oil industry played down suggestions that OPEC would discuss further cuts on top of the historic reductions just over a week ago, but those may be implemented earlier than May, when they were scheduled.

Russia — the other key partner to the cuts package agreed by OPEC+ — did not take part in Tuesday’s talks,and Energy Minister Alexander Novak said there was “no need to dramatize” the American oil fall.

Trump said the US government would help American oil companies threatened with bankruptcy by the dramatic collapse of WTI. “We will never let the great US oil and gas industry down,” he said.

“I have asked the secretary for energy and the secretary to the treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future.”

Monday’s collapse of WTI, sparked by the ending of a monthly contract and a lack of storage, was still being chewed over by energy experts.

“Some may dismiss Monday’s fall into negative WTI prices as a quirk of the futures market on the last day before a contract ended,” said Jim Burkhard, vice president and head of oil markets at IHS Markit consultancy. “But the fact that prices went this low at all reflects brutal market forces that will not disappear with the expiration of a single monthly contract.”

About 30 per cent of global oil demand has evaporated in the past month as big economies have locked down under the impact of the COVID-19 pandemic.

A Saudi energy official downplayed reports that a “flotilla” of super tankers was at sea heading to the US with a cargo of 50 million barrels of crude for delivery next month. The Kingdom had so far this month supplied only a relatively small amount of crude to US destinations, including the Motiva refinery in Texas, the official said.