The U.S. added 3.3 million bbl of oil to the Strategic Petroleum Reserve in May, the largest increase in four months, according to Department of Energy data released Monday.
The additions were all part of an ongoing series of purchases by the Biden administration to restore SPR levels while U.S. crude prices remain below $80/bbl.
The reserve held 370.2 million bbl - 143.8 million bbl of sweet crude and 226.4 million bbl of sour crude - as of Friday, DOE said. That's the lowest amount of SPR crude since November 1983.
May purchases were entirely sour crude, following a pattern seen in recent months.
The oil came from DOE purchases scheduled for April with May delivery dates, the agency said.
SPR holdings fell to a low of 346.75 million bbl in July after the administration approved a series of releases to combat rising energy prices and to make up for declines in Russian crude exports due to international sanctions imposed after it invaded Ukraine in February 2022.
The administration is trying to balance efforts to replenish the stockpile while ensuring the purchases don't increase crude prices. In its SPR solicitations, the administration initially established a $79/bbl price cap that was later increased to $79.99/bbl.
DOE in May said it bought 3.3 million bbl of crude for October delivery and sought bids for 3 million bbl for November delivery. Those bids were due last week and the agency has yet to release the results of that solicitation. The administration last month said its SPR purchases so far have been made at an average cost of $77.18/bbl.
Prices for U.S. benchmark NYMEX West Texas Intermediate contract averaged $78.62/bbl in May, with daily prices ranging from a high of $80.06/bbl on May 17 to a low of $76.99/bbl on Friday.
The NYMEX July WTI contract was trading at $74.26/bbl at about 11:15 a.m. ET Monday.
Prices have been supported by weaker energy demand and strong U.S. oil production, which remains at a record 13.1 million b/d, according to the latest weekly data from the Energy Information Administration.
Analysts, however, expect prices to climb during the summer, as a decision by the OPEC cartel and its allies this weekend to continue voluntary production cuts is expected to lead to an imbalance between supply and demand during the high demand summer driving season.
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 Jeff Barber, jbarber@opisnet.com
(END) Dow Jones Newswires
06-03-24 1206ET
