Last Friday, the White House scheduled a meeting with Donald Trump and the heads of at least seven energy companies to discuss the energy policy.
CEOs of Exxon, Chevron, Occidental Petroleum, Devon Energy, Phillips 66, Energy Transfer Partners, as well as Harold Hamm, former CEO of Continental Resources, will attend the meeting. These companies are not looking for salvation. They just want the market to become regulated.
Meanwhile, Whiting Petroleum, the first shale producer in US, filed for bankruptcy protection on Wednesday. Other major oil producers are also still trying to fight for the price of oil.
Analysts have warned that the decline in oil prices would lead to a wave of consolidation or bankruptcy in the US energy sector.
"The oil tangle is falling apart... This is another bomb that is being dropped, " US politician Jim Cramer said. Cramer noted that the industry is still a key on the economy, given the number of people it employs directly and indirectly.
Cramer also said that US "cannot allow oil to fall to $ 5, $ 10" per barrel. It would be "absolutely devastating for our companies," he said. Cramer also added that almost every company, with the exception of Chevron, is not ready for low price conditions. "You don't want a lot of bankruptcies," he continued.
On Wednesday, the price of oil fell sharply, as Saudi Arabia increased production by more than 12 million barrels per day, flooding the market during a decline in oil demand.
Some analysts say that if oil continues to decline, US may diverge on the path of becoming an energy independent nation. "The loss of energy self-sufficiency may be the real victim of this period, which will not return," Cramer said.
Amid this decline in oil prices, the Department of Energy said that US Secretary of Energy Dan Brouillette and Russian Minister of Energy Alexander Novak "had a productive discussion about the current instability in the oil markets," where the two had agreed to continue the dialogue between major energy producers and consumers, including through the G20, to address this unprecedented period of disruption in the global economy.
Meanwhile, according to a representative of the Russian government in an interview with Bloomberg, Russia does not want to increase crude oil production because it does not make sense for Russian firms to increase it due to the fact that the market is full.
Russian companies made it clear last week that raising production might not be the wisest thing to do right now as the demand for oil continues to fall. Nail Maganov, CEO of Tatneft, who a few weeks ago said that oil at $ 8 is not critical, told reporters last week that it may be economically unprofitable for Russian companies to increase production from April, due to the coronavirus pandemic.
The announcement that Russia has suspended oil production came a few days after the agreement between Russian President Vladimir Putin and US President Donald Trump, wherein representatives of the energy departments of both countries will discuss the situation of the energy industry.
"We will all come together and decide what we can do in this situation, because there is a threat of losing the industry as a whole, which means millions of jobs lost," US President Donald Trump said.
