Crude in U.S. emergency reserve falls to lowest since Oct 1984

Crude in U.S. emergency reserve falls to lowest since Oct 1984

The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif

Register now for FREE unlimited access to Reuters.com

HOUSTON, Sept 12 (Reuters) – U.S. emergency crude oil stocks fell 8.4 million barrels last week to 434.1 million barrels, their lowest since October 1984, according to U.S. Department of Energy (DOE) data released on Monday. The week ended Sept. 9 saw the highest draw since May, according to data released by the U.S. Department of Energy (DOE). It contained approximately 6.3 million barrels sweet crude oil and about 2 million barrels sour crude.

President Joe Biden in March set a plan to release 1 million barrels per day over six months from the SPR to tackle high U.S. fuel prices, which have contributed to soaring inflation.

Register now for FREE unlimited access to Reuters.com

The Biden administration is weighing the need for further SPR releases after the current program ends in October, Energy Secretary Jennifer Granholm told Reuters last week. A DOE spokesperson later said the White House at that time was not considering new releases beyond the 180 million barrels. read more

The Biden administration is less likely to release barrels from the SPR after October if benchmark oil futures continue to drop. Last week, the 50-day moving average of U.S. and European prices both fell below the 200-day moving average, noted research analyst Paul Sankey said.

The SPR stocks also have declined due to sales from congressional mandates and Biden’s price initiative. Online auctions sell oil to qualified oil companies. Prices are determined using a five-day average bracketing delivery date.

The DOE has proposed to replenish the SPR by allowing it to enter contracts to purchase oil in future years at fixed, preset prices. According to the administration, the plan would increase domestic oil production.

Register now for FREE unlimited access to Reuters.com

Reporting by Arathy Somasekhar in Houston;
Editing by Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles.

Read More