The Biden administration is seeking to purchase another 3.3 million bbl of oil for the Strategic Petroleum Reserve, though the purchase could hinge on ongoing recent weakness in U.S. oil prices.
The Department of Energy on Tuesday released a solicitation for the barrels for October delivery to the Big Hill storage facility in Texas.
But, as in keeping with other recent solicitations to purchase oil for the reserve, the administration is seeking to buy barrels priced at $79.99/bbl or lower.
U.S. benchmark West Texas Intermediate crude was priced at $78.48/bbl on Monday following five straight days of declines last week that saw the contract sink from $83.85/bbl on April 26. Prior to last week, WTI had not settled below $80/bbl since March 13.
Stockpiles in the reserve have increased in each of the past six months as the administration continued its efforts to replenish the stockpile.
DOE said Tuesday it has purchased a total of 32.3 million bbl for an average price of $76.98/bbl, as well as accelerated nearly 4 million bbl of exchange returns over that period.
Despite the additions, levels in the reserve remain at the levels equal to those seen in October 1983.
SPR holdings fell to a low of 346.75 million bbl in July as the Biden administration conducted a series of oil releases to combat rising energy prices and to make up for declines in Russian crude exports because of international sanctions imposed after it invaded Ukraine in February 2022.
DOE earlier announced awarding contracts for delivery of 2.95 million bbl in June and for 2.8 million bbl for September delivery.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
--Reporting by Steve Cronin, scronin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com
(END) Dow Jones Newswires
05-07-24 1302ET
