US seeks oil for emergency reserve as maintenance winds down

Credit: REUTERS/Richard Carson

By Timothy Gardner

WASHINGTON, March 14 (Reuters) - The U.S. is seeking to buy 3 million barrels of oil for the Strategic Petroleum Reserve (SPR), as one storage site winds down maintenance that had tempered the pace of replenishing the stockpile, the U.S. Energy Department said on Thursday.

The oil, if purchased, is expected to be delivered in August and September, the department said.

The department issued a solicitation on Thursday of 1.5 million barrels for the Bayou Choctaw, Louisiana site that has undergone maintenance this year. Another solicitation for the same amount at Bayou Choctaw will be released on March 21, the department said.

The SPR has a total of four sites on the coasts of the two states where pumps and other steel equipment are constantly exposed to moist, salty air.

Life extension maintenance at the Bayou Choctaw and Bryan Mound, Texassites this year had slowed the replenishment of the SPR after President Joe Biden's administration had conducted the largest-ever sale of 180 million barrels from the SPR in 2022. That sale was an effort to lower oil prices after Russia invaded Ukraine.

The administration has wanted to buy back oil at $79 per barrel and if prices go higher, it could pose difficulties in buying back oil for the SPR.

West Texas Intermediate (WTI)crude for April rose $1.54, or 1.9%, on Thursday to end at $81.26, its highest since early November.

(Reporting by Timothy Gardner; Editing by Jonathan Oatis and David Gregorio)

((timothy.gardner@thomsonreuters.com; +1 202 380-8348 (Twitter @timogard); Reuters Messaging: timothy.gardner.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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