SPR At 40yr Low, Purchases Cancelled, Iran Attacks Israel, What Could Go Wrong?

Person Holding White and Blue Box

Image Source: Pexels


Bad time for Iran to be involved in a conflict……

Can't see anywhere for oil to go but up….

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 U.S. benchmark West Texas Intermediate on April 2 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 currently do not think they are imminent.”


More By This Author:

Everyone Expecting Rate Cuts; Are They Necessary?
PMI Ruling Sentiment
Recession? Not Today, But…

Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.