The US Department of Energy announced on Wednesday that it will buy up to one million barrels of low-sulfur crude for the government’s oil reserve designated for emergencies.
The ministry said it is seeking to do so as part of efforts to help producers, who are 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, following Congress’s reluctance to adopt the necessary funding.
It is noteworthy that, in March, US President Donald Trump directed Energy Secretary Dan Bruelet to fill the strategic reserve from the last, and the ministry tried 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 that the purchase of up to one million barrels “will test the current conditions of 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.”
US crude inventories fell unexpectedly in the most recent week, as gasoline reserves fell, while distillate inventories increased, according to US energy information.