US Energy Dept releases 500000 barrels from strategic reserve

Ivan Schwartz
September 1, 2017

The company is obliged to replace the oil from reserves at a later date. The U.S. consumes over 9 million barrels of gasoline a day. Those supplies serve as cushions during emergencies like Harvey, which knocked out large swaths of oil and gasoline production. Trump wants to sell off half the reserve.

At the same time, the amount of crude entered into refineries reached a record high of 17.73 million bpd, the data showed.

US crude inventories fell by 5.78 million barrels last week, the API industry group reported on Tuesday, suggesting a gradual tightening of the USA oil market.

The Northeast Gasoline Supply Reserve, set up after Hurricane Sandy caused fuel supply disruptions in 2012, holds 1 million barrels of motor fuel at three sites in New York Harbor, the Boston area, and Maine.

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U.S. commercial crude stocks fell by 5.39 million barrels last week to 457.77 million barrels, the U.S. Energy Information Administration said on Wednesday. Seven other ports remained closed. That plant has not been affected by the storm, which has hammered the Gulf Coast for several days. Gasoline for October delivery was down 0.6 percent at $1.7684. It runs underground and is now under water in many parts of Texas, where inspections are needed before it can be fully operational again, Colonial spokesman Steve Baker said Thursday. During that time, Marathon Petroleum Corp. requested an emergency loan of 1 million barrels to supplement its supplies to support refining operations, according to the Energy.gov website. That's almost twice as much as in September 2008 when Hurricanes Ike and Gustav hit the U.S. Gulf Coast, and in the summer of 2005 when Hurricanes Rita and Katrina struck.

According to the department, the oil will be delivered to the refinery operated by Phillips 66 in Lake Charles, Louisiana in two emergency transfers of 500,000 barrels with more from the SPR available. In January, the Energy Department accepted a bid by Phillips 66 to buy crude from the reserve, the first sale of government crude since 2014. The sale was the first in a series of planned draw-downs through 2025 totaling nearly 190 million barrels, or 27% of the reserve. U.S. crude inventories fell 5.78 million barrels last week, it said on Tuesday.

But gasoline prices are relatively cheap compared to levels earlier this decade, and the end of the peak summer driving season could prevent a further dramatic rise unless there is long-term damage at major refineries. "There are refineries in China that depend on US crude oil".

Harvey shows just how important the US has become to the world's energy supply.

Other reports by GizPress

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