Monday, May 16

US awards 13 mln barrel exchange of crude from strategic reserve


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WASHINGTON — The US Department of Energy said on Tuesday it had approved an exchange of 13.4 million barrels of crude oil from the Strategic Petroleum Reserve to seven companies as part of President Joe Biden’s effort to help control oil prices.

The Biden administration announced a plan in November to release up to 50 million barrels from the SPR after oil prices hit seven-year highs. Nearly 40 million barrels of that has now been released through previous exchanges and a sale of 18 million barrels.

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The companies are: Shell Trading US, 4.2 million barrels; Trafigura Trading LLC, a unit of Farringford NV, 3 million barrels; Phillips 66, 2.3 million barrels; Macquarie Commodities Trading, 2 million barrels; Chevron USA , 885,000 barrels; Exxon Mobil, 515,000 barrels; and BP Products North America, 500,000 barrels.

Companies that take part in exchanges have to return the oil to the reserve, held in a series of caverns on the Texas and Louisiana coasts, at a later date with interest in the form of crude.

Global oil prices mostly fell after the November announcement as the Omicron variant slowed traveling. But they have recently returned to seven-year highs on concerns that supplies could get tight due to Ukraine-Russia tensions and threats to infrastructure in the United Arab Emirates.

The US release for the first time was coordinated with Asian oil-consuming countries such as China, India and South Korea. While there’s been little movement in the other countries to tap their national reserves, China will release crude from its stockpiles around the upcoming Lunar New Year holidays as part of that plan, sources said this month.

(Reporting by Eric Beech and Timothy Gardner; Editing by Leslie Adler and Mark Porter)



financialpost.com