The Department of Energy on Wednesday put out a call to purchase 4.5 million barrels of sour crude oil for the Strategic Petroleum Reserve, but recent strength in crude prices could lead to the effort being unsuccessful.

The solicitation calls for bids at or under the DOE's $79.99/bbl price cap to be submitted no later 11 a.m. CT on July 18. The proposal will be valid until the evening of Aug. 2. But the call for bids come as the price of U.S. benchmark West Texas Intermediate crude settled for the day at $82.10/bbl following a report indicating U.S. crude oil inventories fell for a second time in as many weeks.

The solicitation calls for the crude to be delivered from October through December at the SPR's Bayou Choctaw site in Louisiana.

The DOE made a similar solicitation on June 11, but ultimately no contracts for oil were awarded. While the DOE didn't give a reason for not awarding contracts, West Texas Intermediate prices topped $80/bbl during the solicitation period.

SPR holdings are nearly 42% below where they were when the Biden administration took office in January 2021 as the president authorized sales from the reserve to combat high prices, first during the recovery from the Covid-19 pandemic and then after sanctions were placed on Russian energy exports following that country's invasion of Ukraine.

The SPR now holds about 373.1 million bbl, including 229.3 million bbl of sour crude and 143.8 million bbl of sweet crude, according to the DOE data.

Upcoming purchases include previously awarded contracts for 3.2 million bbl of crude delivered this month, 3.25 million bbl in August, nearly 2.8 million in September, 3.3 million in October and 3 million in November.

The DOE said Wednesday that to date, its recent efforts to refill the reserve have included purchases totaling 38.6 million bbl, as well as nearly 4 million bbl of exchange returns. DOE said the oil purchases have come at an average price of $77/bbl.


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

07-10-24 1711ET