US Exceeds Price Target in Latest SPR Purchase
The Biden administration has surpassed its self-imposed $79 per barrel price ceiling for crude oil purchases to replenish the Strategic Petroleum Reserve (SPR), as reported by Argus. The latest transaction saw the Department of Energy (DOE) acquire nearly 2.8 million barrels of sour crude at $81.34/barrel for September delivery.
This move follows months of DOE adhering to a "good deal for taxpayers" strategy, aimed at refilling the SPR after President Biden authorized the sale of 180 million barrels in 2022 to combat price surges triggered by the Russia-Ukraine conflict.
A DOE spokesperson hinted at an imminent announcement regarding the price deviation. Market adjustments likely influenced the decision, as DOE previously revised its price target upward in response to price volatility.
The latest purchase brings DOE's total contracted volume to 32.4 million barrels at an average price of around $77/barrel. Additionally, 20 million barrels borrowed from the SPR in 2022 are scheduled for return, potentially boosting SPR inventory above 400 million barrels.
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