U.S. to sell $375m of emergency reserve oil this winter
This comes after Congress passed a temporary spending bill that contained a measure authorizing the sale.
President Barack Obama's administration has pushed Congress to approve an up to $2 billion plan for a revamp of the Strategic Petroleum Reserve, a string of heavily guarded underground salt caverns along the Gulf of Mexico filled with crude. The stash currently holds about 695 million barrels of oil.
The $375 million sale, or nearly 7.3 million barrels of oil in today's price, is just the first planned installment.
For each of the next three fiscal years Congress would have to approve the annual sales to reach the up to $2 billion revamp plan. It remains to be seen whether President-elect Donald Trump would urge Congress for the annual authorizations in the coming years.
This sale, which could take place seven to nine weeks after the temporary spending bill is enacted, would pay for the design of the revamp of the SPR and other pre-construction costs.
Further sales would pay for construction of new equipment and new marine terminals to allow the reserve greater capacity to ship oil by vessels. ■