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The White House is considering taking stakes in U.S. energy companies in return for federal aid, Treasury Secretary Steven Mnuchin said Friday.
The Trump administration has already given billions of dollars of federal assistance to airlines in return for an equity stake.
Asked after a White House event about the possibility of the U.S. receiving shares of energy companies in return for assistance, Mnuchin replied: “The president has asked me to work with the Secretary of Energy and we’re looking at a whole bunch of alternatives. It would be premature for me to talk about any one of them, but the president has asked me to look at alternatives.”
Pressed if one of those alternatives was a plan to take stakes in oil companies, Mnuchin said it was.
President Donald Trump signaled his strong support for helping the industry.
“The energy business in very important to me. We’re going to build it up,” Trump said. He suggested another alternative might be for the federal government to buy fuel for the country in advance now that prices are so low. Mnuchin said this was also under consideration.
A collapse in oil prices has left producers reeling, particularly in the nation’s shale patches. The price for the U.S. oil benchmark, West Texas Intermediate crude CL00, +4.36% , has fallen by more than 70% since the end of 2019, plunging as the COVID-19 pandemic slashed demand for gasoline and other fuels. A one-month price war between Saudi Arabia and Russia further added to a global glut of crude that threatens to overwhelm storage capacity and industry infrastructure.
In an extraordinary episode earlier this week, the May WTI contract settled in negative territory in thin trading a day before expiration, with traders willing to pay others to take crude off their hands amid fears there would be nowhere to park it in Cushing, Okla., the delivery hub for Nymex crude futures.
Read:Why oil prices just crashed into negative territory — 4 things investors need to know
Energy companies have announced production cuts, including Continental Resources Inc. CLR, -4.23% and Parsley Energy Inc. PE, -0.90% earlier this month.
