US releases 10 million barrels of reserve crude
The agency will offer 10 million barrels of low-sulphur crude for supply in November from storage caverns in Texas and Louisiana, according to a press statement.
Bids for the supply that will originate from Big Hill, Texas, and West Hackberry, Louisiana, are due by September 27. Awards will be made no later than October 7.
West Texas Intermediate futures briefly pared Monday’s modest gains on the news.
The government’s offer is coming at a time when global benchmark oil prices have retreated to levels seen before Russia’s invasion of Ukraine began as investors heed warnings of a global recession.
The declines in oil futures have sent American pump prices tumbling for weeks, a welcome development for the Biden Administration as it gears up for midterm elections in November.
The timing is also notable as it coincides with the Organisation of Petroleum Exporting Countries (OPEC) discussing the possibility of curbing production. OPEC and its allies agreed to cut output next month by 100,000 barrels a day.
The Department’s planned 180-million barrel supply release was originally set over a six-month period that started in May.
US refiners Valero Energy Co. and Marathon Oil Corp. have been the biggest buyers in the SPR sales so far.