US To Sell 10 Million Barrels Of Crude Oil From SPR Next Week
The US will sell another 10 million barrels of sour crude oil, the Department of Energy said on Wednesday in a Notice of Sale, according to S&P Global Platts.
The Department of Energy will be accepting offers to purchase the crude through August 28, and delivery must be taken between October 1 and November 30.
The 10-million-barrel offering is the latest in a series of SPR sales under a mandatory sales program that seeks to sale 260 million barrels through 2027, and is not part of conscious act to influence the markets.
The SPR holds 645 million barrels of crude oil, 395 million of which is of the sour variety.
The US has periodically sold off part of the SPR, the last of which was in March. Marathon Petroleum, Motiva, and Phillips 66 together purchased 4.32 million barrels for $285.7 million.
Earlier this year, questions were raised about the quality of the SPR after ExxonMobil complained that the crude oil it purchased from the SPR in 2018 contained high levels of hydrogen sulfide. It was not the first company to complain about the issue, with Shell, Macquarie Group, and PetroChina all raising similar concerns. The Department of Energy disputed the claims.
The previous concerns as to the quality may give SPR shoppers pause this time around, as high levels of hydrogen sulfide pose risks to refinery equipment and to humans.
The US is now considering leasing SPR space to Australia, and is also contemplating shuttering at least one of its SPR storage sites and changing the ratio of sweet to sour crude oil. A study is now underway to determine the wisest course of action.
By Julianne Geiger for Oilprice.com