DOE to resume SPR purchases in wake of oil price slump

The US Department of Energy plans to take advantage of the recent crude oil price decline and resume filling the Strategic Petroleum Reserve, it reported Jan. 2.

Jan. 7, 2009

Nick Snow
Washington Editor

WASHINGTON, DC, Jan. 7 -- The US Department of Energy plans to take advantage of the recent crude oil price decline and resume filling the Strategic Petroleum Reserve, it reported Jan. 2.

DOE said it issued a solicitation to buy about 12 million bbl of crude to replenish supplies that were sold following Hurricanes Katrina and Rita in 2005. Congress overwhelmingly passed a law ordering DOE to suspend SPR purchases in May after prices broke the $100/bbl barrier. The ban expired Dec. 31.

The energy department also said it plans to seek repayments from refiners for emergency oil it released from the SPR following Hurricanes Gustav and Ike in 2008, to deliver deferred royalty-in-kind oil, and to solicit new RIK deliveries this spring. The actions are required under the 2005 Energy Policy Act, it said.

Planned acquisitions during 2009 will bring the SPR back to its 727 million bbl storage capacity and provide the US with about 70 days of net import protection.

Contact Nick Snow at [email protected].