U.S. seeks up to 4.5 MMbbl for strategic petroleum reserve
The U.S. Department of Energy (DOE) said on Wednesday it is offering to buy up to 4.5 MMbbl of oil to help replenish the Strategic Petroleum Reserve (SPR), though oil prices are now higher than the target price it wants to make such purchases.
This is the department's latest offer to buy oil to replenish the SPR after President Joe Biden directed a sale of 180 MMbbl, the most ever from the emergency reserve, in 2022 after Russia, one of the world's major oil producers, invaded Ukraine.
The solicitation is to replenish the SPR's Bayou Choctaw site in Louisiana. The oil is for delivery from October–December and bids from oil companies are due on July 18.
The DOE continues to aim to buy the oil back at $79/bbl, below the average price of $95/bbl the 180 MMbbl sold for, it said in a release. But $79 is far lower than the $82.10/bbl price that the West Texas Intermediate benchmark settled at on Wednesday.
The price has risen during the peak U.S. summer driving season and after a jump in U.S. refining activity last week.
The DOE said it did not have more to say when asked for comment about whether it would raise the target price.
So far, the DOE has bought back about 38.6 MMbbl after 2022's historic sale, and worked with Congress to cancel sales from the reserve that had been approved by both Republican and Democratic lawmakers.
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