U.S. to sell 26M more barrels from Strategic Petroleum Reserve
BNNloomberg reported Monday that the Biden administration plans to sell another 26M barrels of crude oil from the Strategic Petroleum Reserve.
The SPR has been drawn down to its lowest levels since 1983; after this latest release, the SPR would dip to 345M barrels. The crude SPR is down from 638 million barrels when Biden took office and the reserve’s lowest level since 1983.
Crude oil futures had finished modestly higher before the SPR news, with Nymex front-month crude closing +0.5% to $80.14/bbl and April Brent crude ending +0.2% to $86.61/bbl, both settling at their highest levels this month.
Oil and gas shares lagged the broader market, -0.6% to finish as the day’s only decliner among the 11 S&P sectors, and four of the day’s largest losers on the S&P 500 were EQT Corp. -2.5%, APA Corp. -2.4%, ConocoPhillips -1.9% and Marathon Oil -1.5%.
The energy sector was the only group to end last week with a gain. Now they’re losing.
Destroying Oil, Draining the SPR
The Biden administration last year sold a record 180 million barrels from the reserve. This sale is required by Congress due to a 2015 budget mandate. The administration simply said Congress failed to act to stop the sale for a reason. There is more to it.
The US House last month passed legislation meant to curb the Energy secretary’s ability to use the reserve unless the government increases the amount of federal lands available for gas and oil drilling.
Biden won’t do it.
Other congressionally required releases — about 140 million barrels slated for fiscal years 2024 through 2027 — were canceled by the Energy Department after lawmakers in December approved a provision in a giant spending bill in a typical dirty deal.
This administration won’t do the right thing without blackmailing Congress first.
GOP wants answers
Republicans accuse the president of failing to explain why Russia’s invasion and the subsequent spike in fuel prices qualified as an emergency. They are also concerned that he hasn’t tended to preserve the physical condition of the reserve’s infrastructure, saying its pipelines, pumps, and caverns have been degraded from frequent drawdowns.
“What has caused this and why he [Biden] has had to use it [the SPR] is because of the war on fossil fuels this administration declared when they first went into office,” Rep. Buddy Carter (R-Ga.), a member of the House Energy and Commerce Committee, said in an interview. “He is jeopardizing our energy security, which jeopardizes our national security.”
Democrats, meanwhile, are welcoming the GOP effort as an opportunity — to remind the public that gasoline prices have fallen on their watch. They’ve fallen from the high of over $5 a gallon that they caused with their war on fossil fuels. Under Donald Trump, gas was $2 a gallon. They like to obfuscate the truth.
They aren’t refilling, refuse to increase production of crude oil
This comes after Russia announced plans to cut production by half a million barrels next month.
The DOE said bids on the crude oil are due on Feb. 28 and that the oil would be delivered from April 1 to June 30.
What part of selling 26M more crude oil from the SPR fits into that?
The House GOP is calling a vote this week on legislation, H.R. 21 (118), that would prohibit releases from the underground petroleum stockpile unless the government approves a corresponding increase in domestic gas and oil production on federal lands. Two weeks ago, the House passed legislation that would ban sales from the reserve to China.
Democrats won’t pass the bills, and Biden won’t sign.
The American Exploration and Production Council, a trade group representing independent oil and gas producers, came out in support of the GOP bill. The Biden administration “should not use our Strategic Petroleum Reserves as a tool to increase crude supply while simultaneously pursuing policies that suppress domestic production of crude and natural gas,” council CEO Anne Bradbury said in a statement.
The media won’t report the details and will only support the Biden Administration. They are state media.
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