The United States’ Strategic Petroleum Reserve (SPR) now has only 453.1 million barrels in its inventory, following another significant drop in the past week that puts the emergency reserve at a low not seen in three and a half decades, Reuters reports, citing the Department of Energy.
In the week ending August 19th, the SPR saw another draw of 8.1 million barrels, following smaller releases in the weeks leading up to that.
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 to 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.
The final plan called for a total release of 180 million barrels of crude from the SPR to counter the inexorable increase in oil prices amid a tight market.
The record-high release of crude oil from the SPR will end this fall.
In addition to the lowest inventory levels in the SPR since 1985, last Wednesday, the Energy Information Administration (EIA) estimated that crude oil inventories (excluding the SPR) had fallen by 7.1 million barrels.
For that week, U.S. crude oil inventories, excluding those in the SPR, were at only 425 million barrels, or 6% below the five year average.
The largest sale from the SPR was announced on August 11, when the Department of Energy said that nine companies would buy 20 million barrels.
According to the Institute of Energy Research, the SPR is expected to shrink to a 40-year low by the end of October, with inventories then at 358 million barrels, compared to 621 million barrels a year ago.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com