(Bloomberg) — The Biden administration won’t move forward with its latest plans to buy oil for the Strategic Petroleum Reserve amid rising prices.
The Energy Department said it was “keeping the taxpayer’s interest at the forefront” in its decision not to purchase as many as 3 million barrels of oil for a Strategic Petroleum Reserve site in Louisiana. The plan for the barrels to be delivered in August and September had been announced in mid-March.
“We will not award the current solicitations for the Bayou Choctaw SPR site and will solicit available capacity as market conditions allow,” the department said. “We will continue to monitor market dynamics.”
The move follows a rally in crude prices, with US benchmark West Texas Intermediate on Tuesday breaking above $85 a barrel for the first time since October. The Biden administration has a target to buy oil at $79 or lower to refill the reserve, though spent an average of about $81 a barrel in its latest purchase of 2.8 million barrels late last month.
The Energy Department has been slowly refilling the emergency oil supply after it reached a 40-year-low following the administration’s unprecedented drawdown of a record 180 million barrels in the wake of Russia’s invasion of Ukraine. It currently holds about 363 million barrels, according to Energy Department data, down from almost 600 million at the start of 2022.
“Domestic crude prices are likely to remain too high for the remainder of the year for DOE to resume its refilling program,” said Bob McNally, president of consultant Rapidan Energy Group and a former adviser to President George W. Bush. “If pump prices keep rising, the Biden administration will shift gears and reconsider SPR releases, though we current do not think they are imminent.”
CEO and Founder of CanAm Bullion has been dedicated to delivering exceptional value to Canadians since 2017. Driven by a mission to empower Canadians with expert investment advice and education, he has positioned CanAm Bullion as a trusted resource for those seeking to enhance their portfolios with precious metals. Under Michael’s leadership, the company has become synonymous with reliability, knowledge, and dedication, helping Canadians achieve greater financial stability and long-term success.
Share This Article
Choose Your Platform: Facebook Twitter Google Plus Linkedin