• 4 minutes Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 8 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 11 minutes Why Trump Is Right to Re-Open the Economy
  • 13 minutes Its going to be an oil bloodbath
  • 1 min "Saudi Armada heading to U.S.", "Dumping" is a WTO VIOLATION.
  • 2 hours Cpt Lauren Dowsett
  • 48 mins Trump will be holding back funds that were going to W.H.O. Good move
  • 5 hours Death Match: Climate Change vs. Coronavirus
  • 26 mins Washington doctor removed from his post, over covid
  • 56 mins Which producers will shut in first?
  • 3 hours Free market or Freeloading off the work of others?
  • 4 hours ‘If it saves a life’: Power cut to 1.5 million Californians
  • 6 hours US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 8 hours Ten days ago Trump sent New York Hydroxychloroquine. Being administered to infected. Covid deaths dropped last few days. Fewer on ventilators. Hydroxychloroquine "Cause and Effect" ?
  • 8 hours Russia's Rosneft Oil is screwed if they have to shut down production as a result of glut.
  • 6 hours How to Create a Pandemic
Alt Text

Is Optimism In Oil Markets Misplaced?

OPEC+ appears willing to cut…

Alt Text

U.S. Rig Count Could Collapse By 65%

The American oil and gas…

Michael Kern

Michael Kern

Michael Kern is a newswriter and editor at Safehaven.com, Oilprice.com, and a writer at Macro-Investing.com. 

More Info

Premium Content

Oil Price Crash Continues Despite $1.5 Trillion Fed Intervention

The Federal Reserve took drastic action on Thursday as the stock market meltdown accelerated, pledging to inject as much as $1.5 trillion into U.S. markets to cull the growing panic sparked by the Coronavirus pandemic.

The Fed noted in a statement, "These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” adding that the operations “will be adjusted as needed to foster smooth Treasury market functioning."

The Fed originally announced an offer to purchase just $500 billion in a so-called three-month “repo-operation,” but raised the ante with an additional $1 trillion in one-month and three-month repo loans to be released on Friday.

Though the surprising move helped lift the spirits of bankers and traders temporarily, U.S. benchmarks quickly fell back, with the Dow Jones down nearly 8 percent on the day.

Oil prices too failed to see a boost from the Fed’s bold move. Though WTI climbed to $32 briefly, it dropped back down to the $30 range soon after.

As the oil price war continues to rage on, it seems nothing can stop the carnage, not even a $1.5 trillion cash injection from the Fed.

Here is the full statement from the Federal Reserve:

- The Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York has released a new monthly schedule of Treasury securities operations and has updated the current monthly schedule of repurchase agreement (repo) operations.  Pursuant to instruction from the Chair in consultation with the FOMC, adjustments have been made to these schedules to address temporary disruptions in Treasury financing markets. The Treasury securities operation schedule includes a change in the maturity composition of purchases to support functioning in the market for U.S. Treasury securities.  Term repo operations in large size have been added to enhance functioning of secured U.S. dollar funding markets.

- As a part of its $60 billion reserve management purchases for the monthly period beginning March 13, 2020 and continuing through April 13, 2020, the Desk will conduct purchases across a range of maturities to roughly match the maturity composition of Treasury securities outstanding. Specifically, the Desk plans to distribute reserve management purchases across eleven sectors, including nominal coupons, bills, Treasury Inflation-Protected Securities, and Floating Rate Notes. The distribution of purchases across sectors will be the same distribution as the Desk uses to reinvest principal payments from the Federal Reserve’s holdings of agency debt and agency MBS in Treasury securities.  The first such purchases will begin tomorrow, March 13, 2020.

- Today, March 12, 2020, the Desk will offer $500 billion in a three-month repo operation at 1:30 pm ET that will settle on March 13, 2020.

- Tomorrow, the Desk will further offer $500 billion in a three-month repo operation and $500 billion in a one-month repo operation for same day settlement.

- Three-month and one-month repo operations for $500 billion will be offered on a weekly basis for the remainder of the monthly schedule

- The Desk will continue to offer at least $175 billion in daily overnight repo operations and at least $45 billion in two-week term repo operations twice per week over this period.

These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak. Reserve management purchases into the second quarter will continue to be conducted with this maturity allocation. The terms of operations will be adjusted as needed to foster smooth Treasury market functioning and efficient and effective policy implementation.

By Michael Kern for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News