By January 23, 2017 0 Comments Read More →

U.S. to sell 8 million barrels of crude oil from Strategic Petroleum Reserve

Strategic Petroleum Reserve

The Strategic Petroleum Reserve stores crude oil in huge underground salt caverns along the Gulf of Mexico, a natural choice due to the proximity of many refineries and distribution points. Photo by Robert Nickelsberg.

Strategic Petroleum Reserve sale 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 Reserve, 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 fiscal 2017 to fund operational improvements to the infrastructure that holds the emergency reserves.

The sale comes roughly a year after the United States lifted a decades-long ban on exporting domestic oil, giving bidders who are awarded contracts the option to export.

There are about 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 each from its Bryan Mound and Big Hill sites in Texas, and up to 2 million barrels from its West Hackberry site in 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 and Richard Chang)

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