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The U.S. Administration could begin crude oil repurchases to fill the Strategic Petroleum Reserve as early as in June, after a Congressionally-mandated sale from the SPR is completed next month, U.S. Secretary of Energy Jennifer Granholm said on Thursday.
“That congressionally mandated sale of 26 million barrels will be completed by June, and it's at that point where we will flip the switch and then seek to purchase,” Granholm said during a hearing in the U.S. House of Representatives.
In October of last year, the administration announced that it would repurchase crude oil for the reserve when prices were at or below about $67-$72 per barrel. The move would be dual purpose in that not only would it replenish the nation’s depleted reserves, but it would boost demand when prices were low instead of sending them into orbit at a time of regular prices.
Early on Friday, the U.S. benchmark, WTI Crude, was trading at around $70 per barrel and on track for a fourth consecutive weekly loss.
After selling more than 200 million barrels of crude from the SPR last year, the U.S. Administration has left the strategic petroleum reserve at its lowest level since 1983, at 372 million barrels of crude.
Earlier this year, Secretary Granholm had suggested that the Administration would start repurchasing crude oil for filling the SPR in the autumn of this year, and that the refilling could take years.
The Administration has previously said that repurchases could begin in the fourth quarter of this year, after maintenance is completed on two sites storing the nation’s crude oil reserves in Texas and Louisiana.
Thursday’s comments from Secretary Granholm “reflect an intense messaging campaign likely intended to mollify Republicans angry about the big SPR draws,” Bob McNally, an energy policy analyst at Rapidan Energy, told Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.