As part an effort to help producers struggling as the coronavirus strangles oil demand, the US Energy Department said it will buy up to 1 million barrels of sweet crude for the government’s emergency petroleum reserve.
Previously, an initial plan to buy up to 30 million barrels for the Strategic Petroleum Reserve cancelled by the department after Congress failed to fund it. The department, after cancelling the purchase, arranged a plan to rent space for companies to store some oil in the SPR.
Energy Secretary ordered by Donald Trump in March to fill the SPR to the top. To purchase a total of 77 million barrels, the department then tried to find funding. The oil will be purchased by the department from small to midsize domestic producers.
Whether there would be further purchases if the test yielded favorable results, the Department did not immediately give comment. To store 23 million barrels of crude, the Energy Department said in late April that Exxon Mobil Corp, Chevron Corp and seven other companies had agreed to rent space. So far under the leasing program, the Energy Department said about 4.8 million barrels of oil have been delivered to the SPR in late April and in May.
