US buys 3 million barrels of oil for strategic reserve

© Reuters. FILE PHOTO: An oil storage tank and crude oil pipeline equipment is seen during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson/File Photo

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(Reuters) – The United States has finalized contracts to purchase three million barrels of oil to help replenish the Strategic Petroleum Reserve (SPR) after the largest sale in history last year, the U.S. Department of Energy said on Tuesday.

The department said it bought the oil, for delivery to a site in Big Spring, Texas, for an average of $77.31 a barrel, below the average of $95 a barrel that oil sold for in 2022.

The administration of President Joe Biden had conducted sales last year, including a record one of 180 million barrels, to help control oil prices after Russia, a large crude exporter, invaded Ukraine.

The U.S has now purchased about 14 million barrels for replenishment after last year’s sales. About 4 million barrels are also coming back to the SPR by February as oil companies return oil that had been loaned to them through a swap.

On the latest transaction, Sunoco Partners Marketing & Terminals LP sold 1.2 million barrels to the SPR, while Macquarie Commodities Trading US LLC and Phillips 66 (NYSE:PSX) each sold about 900,000 barrels, the Energy Department said on its website.

The Energy Department had already secured the cancellation of 140 million barrels in congressionally mandated sales from the SPR scheduled from late this year through late 2026. The cancellation “has led to significant progress toward replenishment,” the department has said.

Source: Investing.com