The target date for selling 180 million barrels of crude from the US Strategic Petroleum Reserve (SPR) appears to have been extended beyond October with the Department of Energy’s announcement Monday that it would sell up to 10 million barrels for delivery in November, reports Portal.
The 10 million barrel sale will bring total sales to 165 million barrels from the 180 million barrel target to be sold by the end of next month.
In March, the Biden administration approved the release of 1 million barrels a day from the SPR over a six-month period to lower oil prices and potentially boost domestic production through deals with companies to buy future oil at fixed prices.
The SPR releases come in response to the disruption in global oil markets caused by Russia’s invasion of Ukraine and subsequent Western sanctions that have led to soaring oil and gas prices.
Last week, Bloomberg reported that the government could start filling the SPR if oil prices fall below $80 a barrel. The timing is being considered as the Biden administration seeks to keep U.S. oil production growing and prevent oil prices from collapsing, sources with knowledge of the matter told Bloomberg.
However, Washington denied that report, saying there would be no rush to buy crude to replenish the SPR and that purchase plans were not tied to any specific oil price below.
The new sale of 10 million barrels will be sweet crude and the contracts will be awarded by October 7, citing the Energy Department, according to Portal.
When asked about a date for the sale of the entire 180 million barrel target, a senior Biden administration official told reporters, as transmitted by Portal, “As we look ahead, I think what you’re looking at right now is, that we assess the current market dynamics and ensure our releases are in line with requirements.”
By Charles Kennedy for Oilprice.com
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