Sale of US crude oil reserves to fund operational improvements
HOUSTON, Jan 9 (Reuters) – The U.S. Department of Energy on Monday issued a Notice of Sale for crude from its Strategic Petroleum Reserves, with bids for 8 million barrels of light, sweet oil due by Jan. 17.
The sale is part of a resolution to sell up to $375.4 million of crude in the fiscal year 2017 to fund operational improvements to the infrastructure that holds the emergency reserves.
The sale comes roughly a year after the U.S. lifted a decades-long ban on exporting domestic oil.
There are approximately 695 million barrels of oil in the reserves, which are kept in heavily guarded salt caverns along the Texas and Louisiana coasts. The program was developed to shield the U.S. economy from supply disruptions following the 1973 and 1974 Arab oil embargo.
The DOE will sell up to 3 million barrels from Bryan Mound, Texas; up to 3 million barrels from Big Hill, Louisiana; and up to 2 million barrels from West Hackberry, Louisiana. Contracts will be awarded at the end of January.
Deliveries will take place in March and April, with a possibility for February deliveries.
(Reporting by Liz Hampton; Editing by Marguerita Choy)