Biden administration’s latest move to bolster national oil reserves amid ongoing supply challenges

  • DOE awarded contracts for nearly 2.5 million barrels of crude for the Strategic Petroleum Reserve.
  • Contracts include delivery of about 800,000 barrels per month from January to March.
  • Total awarded to Macquarie Commodities Trading US for $180.312 million at an average price of $72.85 per barrel.
  • Purchase price is below the $79.99 per barrel cap set by the DOE.
  • Earlier this month, contracts for 1.5 million barrels were awarded for $111.46 million.
  • Current SPR holds 377.2 million barrels of oil, significantly lower than levels in January 2021.
  • Ongoing efforts to replenish the national stockpile after previous releases due to energy price concerns and supply disruptions.

The Energy Department has recently awarded contracts for the purchase of nearly 2.5 million barrels of crude oil for the Strategic Petroleum Reserve (SPR). This marks the second significant purchase announced by the Biden administration this month. The contracts stipulate the delivery of approximately 800,000 barrels each month to the SPR’s Bryan Mound site in Texas, scheduled from January through March. The total delivery of 2.475 million barrels was awarded to Macquarie Commodities Trading US for $180.312 million, translating to an average price of $72.85 per barrel, which is notably below the $79.99 per barrel price cap set by the DOE. Earlier in August, the administration had also awarded contracts for 1.5 million barrels of sour crude for $111.46 million, with an average price of $74.31 per barrel, again under the cap. As of last week, the SPR holds 377.2 million barrels of oil, including 143.4 million barrels of sweet crude and 233.8 million barrels of sour crude. This latest purchase is part of the DOE’s ongoing efforts to replenish the national stockpile, which has seen monthly additions in 2024, although current levels remain about 41% lower than when President Biden took office in January 2021. The administration had previously initiated a series of oil releases to mitigate rising energy prices during the recovery from the Covid-19 pandemic and to address supply disruptions caused by sanctions following Russia’s invasion of Ukraine in February 2022.

Factuality Level: 10
Factuality Justification: The article provides accurate information about the Energy Department’s purchase of crude for the Strategic Petroleum Reserve, including details such as contract amounts, delivery timelines, and prices. It also offers context on the current levels of oil stored in the reserve and the reasons behind these purchases. The source is reputable and the reporting is objective.
Noise Level: 2
Noise Justification: The article provides relevant information about the Energy Department’s purchase of crude for the Strategic Petroleum Reserve and includes specific details such as contract amounts, prices, and delivery timelines. It also offers context on the current levels of oil stored in the reserve compared to when President Biden took office. The content is focused on the topic and provides factual information without any apparent noise or filler content.
Private Companies: Macquarie Commodities Trading US,Oil Price Information Service
Key People: Steve Cronin (Reporter), Michael Kelly (Editor)

Financial Relevance: Yes
Financial Markets Impacted: Crude oil prices and the Strategic Petroleum Reserve
Financial Rating Justification: The article discusses contracts for purchasing crude oil by the Energy Department, which impacts the price of crude oil in financial markets and affects the Strategic Petroleum Reserve, a significant stockpile that can influence global supply and demand dynamics.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no mention of an extreme event in the last 48 hours.
Deal Size: The deal size for the purchase of nearly 2.5 million bbl of crude for the Strategic Petroleum Reserve is $180.312 million.
Move Size: No market move size mentioned.
Sector: Energy
Direction: Up
Magnitude: Medium
Affected Instruments: Commodities

Reported publicly: www.marketwatch.com