The US is looking to lease out space for companies to store oil in the Strategic Petroleum Reserve (SPR) after its plans to buy millions of crude oil barrels fell through, according to various media sources.
At the direction of US President Trump, the Department of Energy (DOE) sought to fill the SPR to its maximum capacity by purchasing 77 million bbl of US-produced crude oil. The DOE announced a solicitation on 19 March for the purchase of an initial 30 million bbl to begin filling the SPR.
However, DOE suspended those plans after the requested $3 billion in funding for the project was left out of a $2-trillion stimulus package that was approved by the US Congress.
The US is currently facing a glut of oil and limited space to store it as weak demand drags futures prices to the $20/bbl range.
Inventory data released by the Energy Information Administration (EIA) on 1 April showed domestic crude oil inventory increased by 13.8 million bbl to 469.2 million bbl for the week ending 27 March. It was the highest level since the week of 21 June 2019, representing a 10-month high.
EIA data showed SPR inventory at 635 million bblfor the week ending 27 March. The highest capacity held by the SPR was 727 million bbl in December 2009.