US Offers 11 Million Barrels Of Oil For Sale From Strategic Reserve
NEW YORK, Aug 20 (Reuters) - The U.S. Department of Energy (DOE) is offering 11 million barrels of oil for sale from the nation's Strategic Petroleum Reserve (SPR) ahead of sanctions on Iran that are expected to reduce global supplies of crude.
The delivery period for the proposed sale of sour crudes will be from Oct. 1 through Nov. 30, according to Monday's notice.
The U.S. government has introduced financial sanctions against Iran which, beginning in November, also target the petroleum sector of OPEC's third-largest producer.
The sale appears to be designed to show the Trump administration is taking measures to restrain energy price increases ahead of the sanctions, one crude trader told Reuters.
U.S. crude was up by 45 cents at $66.36 a barrel in afternoon trading on Monday.
As a shale boom helped domestic oil production hit an all-time record this year, U.S. lawmakers increasingly have viewed oil-reserve sales as a way to reduce deficits and fund government operations.
U.S. President Donald Trump complained this year that oil prices are "artificially very high" and a potential release from the SPR, ahead of the U.S. midterm elections in November, was widely seen as a way to bring relief to motorists who have seen gasoline prices jump in the past year.
However, American drivers are unlikely to see prices at the pump fall by crude releases from the SPR because U.S. oil production already is sky high, analysts have said.
Still, prices could temporarily dip thanks to seasonal factors.
"The well-timed release may, optically help Trump achieve his goal of lowering domestic gasoline prices ahead of midterm elections given that the fall shoulder season is typically when retail prices fall and refiners head into turnarounds," said Michael Tran, commodity strategist at RBC Capital Markets.
Earlier this year, the DOE sold about 5.2 million barrels of oil from the SPR to five companies including top refiners Valero Energy Corp and Phillips 66.
Offers for the latest sale are due at 2:00 p.m. Central Time, Aug. 28, the notice said.
SPR crude oil samples are not available prior to deliveries, the DOE said.
Three firms that bought crude oil last year from U.S. emergency stockpiles raised concerns about dangerous levels of a poisonous chemical in the cargoes, Reuters reported in March.
All three firms bought cargoes of SPR oil stored in an underground salt cavern in Bryan Mound, Texas last year.
The latest offer for sale includes sour crude from Bryan Mound, in addition to West Hackberry and Big Hill, the notice said.
(Reporting by Devika Krishna Kumar in New York; editing by Jonathan Oatis and Susan Thomas)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension