U.S. Sells 4.32 MMbbl from Strategic Petroleum Reserve

The U.S. Department of Energy (DOE) has sold 4.32 MMbbl of sweet crude oil from the nation’s Strategic Petroleum Reserve (SPR) for a total of about $285.7 million, an average of $66.14/bbl, according to documents posted to the agency’s website and as reported by S&P Global Platts.

The agency sold 2 MMbbl to Phillips 66 for nearly $131 million, or about $65.48/bbl; 1.62 MMbbl to Marathon Petroleum for almost $108.7 million, or about $67.09/bbl; and 700,000 bbl to Motiva Enterprises for about $46.1 million, or $65.86/bbl. Deliveries, expected to be completed in May, will be made by vessel and pipeline, according to the successful rewards report on the sale. The sale was announced Feb. 28 and offers were due March 13, 2019.

The sale was aimed at fulfilling the requirements of a section of the Bipartisan Budget Act of 2015 that authorized DOE to sell up to $2 billion worth of Strategic Petroleum Reserve crude in fiscal years 2017 through 2020 to complete a modernization of the reserve. DOE is permitted to sell up to $300 million worth of SPR crude in fiscal 2019 for the modernization program.

Congress has passed laws requiring the Energy Department to sell roughly 290 MMbbl of oil from the SPR through fiscal 2017. As of mid-March, the reserve held 649.1 MMbbl, including 254.6 MMbbl of sweet crude and 394.5 MMbbl of sour crude, according to DOE.

(SOURCE: The Weekly Propane Newsletter, April 8, 2019)