Connect with us

World News

US to sell 32 million barrels of crude from four sites as part of strategic sale



An oil storage facility at Bryan Mound Strategic Petroleum Reserve, Texas, US.

The United States will sell 32 million barrels of crude oil from four Strategic Petroleum Reserve (SPR) sites to be delivered between the end of December and April 2022, the Department of Energy (DOE) said as it tries to reduce global prices. Auctions for oil.

International oil prices remain above $80 a barrel after US President Joe Biden’s administration announced on Tuesday that it was pulling millions of barrels of oil from strategic reserves in coordination with Britain, China, India, South Korea and Japan. will issue.

However, traders said they expected sales of SPR oil, which is primarily blended sour, or high-sulfur, crude, would undercut the value of American sourdough crude grades, such as Mars and Southern Green Canyon, and Asia. which mainly processes high sulfur oil.

In the first auction of coordinated releases, approximately 10 million barrels will be made available from Big Hill and Bryn Mound in Texas, about 7 million barrels from West Hackberry in Louisiana and another 5 million barrels from Bayou Choctaw in Louisiana, the DOE said. its website.

Delivery will be from January to April 2022, early delivery will be accepted at the end of December.

The DOE said buyers would have to return the oil at a later date, between 2022 and 2024.

Companies are required to submit bids by December 6 and contracts will be awarded no later than December 14.

The issue, released over four months, equates to a steady 270,000 barrel-per-day stream of medium citrus grades that provide direct competition to Mars, said one trader who spoke on condition of anonymity.

The quality of the crude oil to be released will have an API gravity of 31 to 33 degrees, the trader said, adding that it was “very good news” for Asian buyers of Mars.

The grade, already priced at minus $3.50 a barrel, is expected to weaken further against WTI on Wednesday.

South Korea is a major buyer of Mars crude in Asia, while China has bought the grade whenever the arbitrage window is open.

Shortly after the announcement of the SPR, the WTI monthly spread also changed to contango, which makes it economical for traders to ship oil over long distances as its value increases over time.

DoE will also announce the sale of 18 million barrels of SPR crude oil before December 17.

The winners of a regular, legally required US SPR sale of 20 million barrels of crude in September were: Atlantic Trading and Marketing Inc., a branch of French company Total Energy, Chevron USA, ExxonMobil Oil Corp., Marathon Petroleum Supply and Trading, Motiva Enterprises. , Philips 66 Company, Unipec America Inc. and Valero Marketing & Supply Co.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)


Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright Indian Lekhak Limited 2021. All Rights Reserved