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US sells 14mn bl of sour SPR crude

14 Sep 2017, 10.02 pm GMT

US sells 14mn bl of sour SPR crude

Washington, 14 September (Argus) — Valero, BP and Phillips 66 are among the companies awarded contracts to buy 14mn bl of sour crude from the US Strategic Petroleum Reserve (SPR) in a government-run sale that raised $664mn in revenue.

Deliveries of the crude will occur between 2 October and 30 November. The US is selling crude from three of the four storage sites that make up the SPR: 6mn bl from the Bryan Mound site in Texas, 3mn bl of crude from its Big Hill site in Texas and 5mn bl from the West Hackberry site in Louisiana.

Valero bought the largest amount of crude in the sale and paid an average of $47.34/bl for 5.6mn bl of crude. BP was awarded 4mn bl for an average price of $47.57/bl. Phillips 66 bought 1.7mn bl for an average price of $47.60/bl.

Macquarie Commodity Trading purchased 1.1mn bl for an average price of $47.37. ExxonMobil was awarded 1mn bl for an average price of $47.39/bl. Shell purchased 600,000 bl for an average price of $47.45/bl.

The US Congress authorized the crude sales in 2015 and 2016 through laws intended to generate revenue for government spending and medical research. The US plans to sell at least another 149mn bl of crude from the reserve by 2025 under those laws, and potentially an additional 30mn bl to pay to modernize infrastructure that makes up the SPR.

The SPR held 677mn bl as of 8 September, according to government data.

President Donald Trump's administration in the past three weeks separately authorized the SPR to loan up to 5.3mn bl of sweet and sour crude to refineries that were struggling to access crude supplies in the wake of Harvey. The total amount of SPR crude delivered under those exchange agreements was 3mn bl as of today.

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