To the emergency reserve ... the United States buys a million barrels of oil

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To the emergency reserve ... the United States buys a million barrels of oil

 

Reuters

May 14, 2020

 

 

A previous plan to buy 30 million barrels of strategic oil reserves was canceled

The US Department of Energy announced on Wednesday the purchase of up to one million barrels of low-sulfur crude for the government oil reserve designated for emergencies, as part of efforts to help producers suffering under the demand collapse due to the Corona virus.

The move comes after the ministry canceled a previous plan to buy up to 30 million barrels of strategic oil reserves, after Congress's reluctance to adopt the necessary funding as lawmakers saw that this would help oil companies during the Corona virus pandemic.

In March, US President Donald Trump directed Energy Secretary Dan Bruilett to fill the strategic reserve with one another, and the ministry attempted to raise funding for the purchase of 77 million barrels, which would have brought the stock to its maximum capacity of 714 million barrels.

The ministry said in a statement that the purchase of up to one million barrels "will test the current conditions of current crude oil available for strategic reserve in exchange for the New York Stock Exchange futures contracts for West Texas Intermediate crude traded on the financial market."

The ministry has yet to respond to a question if additional purchases will follow if the test results are positive.

Reuters