The Federal Reserve on Thursday said it will hold off selling its holdings in oil and natural gas companies, even as the price of oil and gas futures fell to their lowest level since 2009.
The central bank said it plans to issue about 5 million shares of stock to cover the cost of repaying bondholders.
The price of crude oil has fallen to $52 a barrel from more than $100 a barrel a year ago.
The announcement came as oil prices continued to slide and U.S. stocks lost ground in early trading.
Oil prices are falling in response to the Federal Reserve’s decision to keep its bond-buying program in place through 2019 and its decision to delay asset purchases, including of mortgage-backed securities.
At the same time, oil prices have risen to a record $104 a barrel.
“The Fed’s announcement today is intended to give time to the market to adjust and move to a more favorable outlook,” said Doug Noyes, chief investment strategist at UBS Wealth Management in New York.
The Fed has been trying to slow the slide in oil prices and push down interest rates, as investors worried about a potential economic downturn.
The Federal Reserve said in a statement Thursday that it will begin issuing shares in companies it has sold bonds for the first time in four years.
The Fed said the stock buybacks will help fund “reinsurance against future declines in oil-related asset prices.”
The stock buyback program began in December and has since covered more than 10 million shares, the Fed said.