Government to buy back oil it sold in SPR test last year.
The US government has awarded contracts to buy 4.3 million barrels to replenish its Strategic Petroleum Reserves after a surprise sale/test last year. The Department of Energy will buy the oil from BP and Noble after they won a tender.
In March of last year, the US government sold 5 million barrels in what it called a test but many in the market at the time thought it was a message to Russia as it ramped up deployments in Ukraine.
Oil prices were around $100 when the sale was announced on March 12. They're around $51.50 now. At 4.3 million barrels, that's a savings of about $216 million.
WTI crude oil
The deliveries are expected to be completed by the end of July and may be giving oil prices a lift although 5 million barrels is a drop in the bucket for the global oil market. The SPR holds about 727 million barrels.
