The US Department of Energy (DOE) released a Request for Proposals (RFP) to purchase up to one million bbl of sweet crude oil to test the oil market. The oil is for delivery to the Strategic Petroleum Reserve (SPR) during July with early deliveries accepted in June.
Under the solicitation, DOE will purchase crude sourced from small to midsize US oil producers. Delivery will be to one or more of three SPR storage sites – Big Hill (TX), Bryan Mound (TX), and Bayou Choctaw (LA) – based on bidder preference and scheduling logistics.
The purchase will serve as a test of the current conditions of physical crude oil available to the SPR, as opposed to the financial market trading WTI NYMEX futures contracts. This purchase complements deliveries of crude currently scheduled for June or July under DOE’s crude oil storage initiative, which was launched in April.
DOE must receive bids by 1 pm Central Time May 27. DOE intends to award contracts by May 29. Deliveries will take place in June or July 2020.
