US Energy Secretary Jennifer Granholm told lawmakers her department could start repurchasing oil for the Strategic Petroleum Reserve (SPR) after completing a congressionally mandated sale next month.
“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 told lawmakers in a hearing in the US House of Representatives.
The Biden administration last year conducted the largest ever sale from the SPR of 180 million barrels. That and other sales last year have pushed the reserve to about 372 million barrels, the lowest since 1983.
Granholm previously said the Energy Department could start buying back in the fourth quarter after maintenance on two of the reserve’s four sites on the coasts of Texas and Louisiana.
The administration has said it will buy oil when prices are consistently at or below $67 to $72 per barrel. US crude prices fell more than 2% on Thursday to settle at $70.87 a barrel.
Granholm’s comments “reflect an intense messaging campaign likely intended to mollify Republicans angry about the big SPR draws,” said Bob McNally an energy policy analyst at Rapidan Energy. Granholm’s comments also likely seek to dissuade OPEC+ from cutting supply again, he said.
OPEC+ last cut output in April, a surprise move of about 1.15 million barrels per day. Oil prices fell on Friday and were set to end the week lower for the third straight week, as the market balanced supply fears against renewed economic concerns in the US and China.
Published in The Express Tribune, May 13th, 2023.
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