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The target date for selling 180 million barrels of crude oil from the U.S. Strategic Petroleum Reserve (SPR) appears to have been extended beyond October with the Department of Energy’s announcement on Monday that it would sell up to 10 million barrels for November delivery, Reuters reports.
The 10-million-barrel sale will bring total sales to 165 million barrels out of the 180-million-barrel target to be sold by the end of next month.
In March, the Biden Administration authorized the release of 1 million bpd from the SPR over a period of six months in a bid to lower oil prices and potentially boost domestic production through contracts with companies to purchase future oil at fixed prices.
The SPR releases are a response to the disruption of global oil markets caused by Russia’s invasion of Ukraine and subsequent Western sanctions that have led to soaring oil and gas prices.
Last week, Bloomberg reported that the Administration could start filling the SPR when oil prices drop below $80 per barrel. The timing is being considered as the Biden Administration looks to have U.S. oil production continue growing and prevent a plunge in oil prices, sources with knowledge of the matter told Bloomberg.
However, Washington denied that report, saying there would be no rush into buying crude to refill the SPR, and that the purchase plans were not pegged to any specific oil price below.
The new sale of 10 million barrels will be of sweet crude and contracts will be awarded by October 7th, according to Reuters, citing the Department of Energy.
When asked about a date for selling the full 180 million barrels targets, a senior Biden Administration official told reporters, as carried by Reuters, “As we look to the future, I think what you’re seeing right now is us evaluating the current market dynamics and making sure that our releases align with the needs.”
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com