US to buy 6 million bbls of crude for SPR
The US Department of Energy (DOE) announced two tenders to purchase up to 6 million bbls of crude oil for deliveries from September to December to replenish its Strategic Petroleum Reserves (SPRs).
PHOTO: A crude oil pumpjack with the US flag in the background. Getty Images
The US energy department intends to buy another 6 million bbls of crude at a price of $79/bbl or below. This is the third SPR purchase this year. In May, it purchased about 3.3 million bbls of crude oil for deliveries in October.
The DoE announced two tenders, one for 1.5 million bbls for delivery in September, and another for 4.5 million bbls for delivery in October, November, and December.
These new tenders are in addition to the 9 million bbls already secured for purchase into the Big Hill storage facility, scheduled to be delivered between September-November.
The energy department has so far purchased a total of 38.6 million bbls of crude oil for the SPR at an average price of $77/bbl. The crude oil is stored at the Big Hill storage facility in Texas.
The DOE further aims to avoid the unnecessary sale of SPRs. It has already cancelled the 140 million bbls of congressionally mandated SPR sales scheduled for 2024 through 2027.
The SPRs stood at around 370 million bbls as of 31 May, marginally higher than a year ago, according to US Energy Information Administration (EIA) data. These reserves remain much lower compared to peak levels of 555 million bbls seen in April 2022.
By Aparupa Mazumder
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