Please use symbol entry at top right of page to search

U.S. emergency crude stockpile falls to lowest in 37 years

By Arathy Somasekhar

HOUSTON, Aug 1 (Reuters) - The U.S. emergency crude oil stockpile fell by 4.6 million barrels last week to its lowest level since May 1985, according to the Department of Energy on Monday.

Crude held in the Strategic Petroleum Reserve (SPR) dropped to 469.9 million barrels for the week ended July 29, according to DOE data, in the smallest weekly withdrawal since May.

U.S. President Joe Biden in March set a plan to release 1 million barrels per day (bpd) over six months from the SPR to tackle high fuel prices contributing to soaring inflation.

The SPR held about 618 million barrels last September and its stocks have declined due to sales from congressional mandates and Biden's price initiative. U.S. gasoline prices are about 40 cents a gallon lower than what they would have been without the sales, the White House said last week

Since May, releases have averaged 880,000 bpd, not meeting the 1 million bpd plan. A DOE spokesperson said the slowdown had occurred because the July 4 holiday and use of an additive to cool crude for transportation had affected some deliveries.

The oil is sold to accredited oil companies via online auctions and prices are set using a five-day average bracketing the date of delivery.

Oil companies have not always bought all the crude on offer during the Biden administration's release. For instance, the department said that only about 39 million barrels had been bought in a round in which it had offered 45 million barrels.

The Energy department has proposed to replenish the SPR by allowing it to enter contracts to purchase oil in future years at fixed, preset prices. The administration said it believes the plan would help boost domestic oil production.

Refiner Valero Energy's (VLO) chief commercial officer, Gary Simmons, last week said he expected lower volumes to be released from the SPR in the future, as demand forecasts had been lowered. (Reporting by Arathy Somasekhar in Houston and Timothy Gardner in Washington, D.C.; Editing by Marguerita Choy and Bradley Perrett)

Copyright © Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.