Trump's top economic adviser Larry Kudlow says oil prices should rebound as the economy opens
- Larry Kudlow said oil prices should recover from recent lows as the US economy reopens in a Wednesday interview with CNBC.
- On Monday, US West Texas Intermediate crude oil closed at negative $37 per barrel, falling below zero for the first time ever.
- "I'm hoping that this oil slump will prove to be temporary," Kudlow said. He also said he hopes that the US economy will soon be able to reopen.
- Read more on Business Insider.
Larry Kudlow said that oil prices should recover from recent historic lows as the US economy reopens following lockdowns to curb the spread of the new coronavirus.
"I'm hoping that this oil slump will prove to be temporary," Kudlow told CNBC in an interview Wednesday. "Not many people are driving right now, as you know, and there's a glut of oil."
He continued: "It will, I hope, take care of itself. Markets will take care of themselves over time."
The comments from President Trump's top economic adviser come after oil prices slumped to a record low on Monday, when US West Texas Intermediate crude closed at negative $37 per barrel, the first time the commodity has ever traded below zero. Prices have rebounded slightly, but remain low — oil has slumped roughly 65% year-to-date as the coronavirus pandemic craters global demand.
"The coronavirus worldwide caused the collapse in demand. Through no fault of anybody, this virus has pushed us into a big economic contraction," said Kudlow.
In the US, "the rig count is way down, demand is way down, production is falling. There's not much we can do about that," Kudlow said, adding that the White House is considering options for relief to the industry, though nothing has been decided yet.
"There's a lot of deflation out there as we go through this contraction," he said. "We will propose regulatory and tax and investment policies to help out as best we can."
Still, Kudlow's hope is that strict lockdowns due to the pandemic will soon be over. "We'll come out of this soon, the economy will reopen, the economy will restart," he said.