U.S. Oil Producers Begin Storing Crude in Strategic Reserve

[ceo_energemsier + 1,818]

U.S. Oil Producers Begin Storing Crude in Strategic Reserve

 

 

U.S. oil producers running out of space for storage amid an unprecedented slump in demand have started making deliveries to the nation’s emergency stockpile.

This month, 1.1 million barrels have been delivered into Strategic Petroleum Reserve storage. The Energy Department has finalized contracts announced earlier this month for companies to rent about 23 million barrels of capacity in the SPR, according to an official.

On April 14, the department said it was negotiating leasing deals with nine producers, with most of the oil to be delivered in May and June, and possible early deliveries in April. It’s part of a plan by the Trump administration to help drain the nation’s growing glut of crude as commercial storage quickly fills up.

The oil earmarked for storage under the program was to be aggregated from small, medium and large producers and companies can schedule return of their crude through March 2021, minus a small amount to cover storage costs.

[Mitchell123 0]

Here's a podcast that I found that provides a simplified explanation of why oil prices went negative. What do you think about what they talk about? https://www.buzzsprout.com/1039846/3520228

[Ironflimmer + 18]

1 hour ago, ceo_energemsier said:

U.S. Oil Producers Begin Storing Crude in Strategic Reserve

 

 

U.S. oil producers running out of space for storage amid an unprecedented slump in demand have started making deliveries to the nation’s emergency stockpile.

This month, 1.1 million barrels have been delivered into Strategic Petroleum Reserve storage. The Energy Department has finalized contracts announced earlier this month for companies to rent about 23 million barrels of capacity in the SPR, according to an official.

On April 14, the department said it was negotiating leasing deals with nine producers, with most of the oil to be delivered in May and June, and possible early deliveries in April. It’s part of a plan by the Trump administration to help drain the nation’s growing glut of crude as commercial storage quickly fills up.

The oil earmarked for storage under the program was to be aggregated from small, medium and large producers and companies can schedule return of their crude through March 2021, minus a small amount to cover storage costs.

The global daily surplus is approx 30 mbpd at this time, perhaps a little less. So storage for 23 m barrels is not going to change much. It is a great initiative and I wish there was more storage available, since we are heading for disaster. But the maths are brutal - storages will be full in a few weeks and then what do we do?

[ceo_energemsier + 1,818]

Nine companies rent 23 million barrels worth of space in U.S. emergency oil reserve -official

 

 

WASHINGTON (Reuters) - Nine companies including Chevron Corp , Exxon Mobil Corp and Alon USA Inc have agreed to rent space to store 23 million barrels of crude in the U.S. emergency oil reserve, a U.S. official said on Wednesday, as the Trump administration tries to help energy firms deal with the crash in oil prices.

The Department of Energy, or DOE, said on April 2 it would offer to oil companies 30 million barrels of space in the Strategic Petroleum Reserve, or SPR. Later in the month, it said that companies were in contract negotiations for only 23 million barrels of space.

President Donald Trump had ordered Energy Secretary Dan Brouillette in March to fill the reserve, which has about 77 million barrels of free space, "to the top." But an initial plan to buy about 30 million barrels fell through after the U.S. Congress declined to fund the purchase.

The Energy Department did not immediately respond to a request for the terms of the lease contracts.

The other companies leasing space in the reserve are Atlantic Trading, Energy Transfer, Equinor Marketing & Trading (US) Inc, Mercuria Energy America, MVP Holdings, LLC and Vitol, Inc. The list of companies was provided by the U.S. official on condition of anonymity.

The DOE has said it is continuing to work with Congress on finding ways to fund a purchase of oil for the reserve and could initiate more plans to lease space in the facility.

Companies storing oil will be allowed to keep it in the SPR through March 2021 and will pay a small amount of oil to cover the SPR’s cost of storage, the department said earlier this month. Most of the deliveries of the oil will be received in May and June, with some shipments in April.

The SPR website says that 1.1 million barrels of sour crude oil had been moved to the facility in April and the reserve currently holds 636.1 million barrels.

Oil prices surged more than 10% on Wednesday after U.S. crude stockpiles grew less than expected feeding optimism that fuel consumption will recover as some European countries and U.S. states ease lockdowns caused by the coronavirus. [O/R]

[Tom Kirkman + 8,860]

President Trump: Federal Lockdowns To Expire April 30th

President Trump has said coronavirus related lockdowns will be allowed to expire on the federal level. While speaking to reporters on Wednesday, the president stated it will be up to governors to decide when and how to reopen their states.

According to Vice President Mike Pence, the federal government will work with governors to make sure the restrictions are lifted in a safe and responsible manner.  ...

 

... The president also reiterated his support for America’s oil industry, saying the federal oil storage could absorb another several hundred millions of barrels.

 

[pisstol + 48]

from oilprice.com today: U.S. Oil Storage May Have Room For ‘’Several Hundred Million Barrels’’:

https://oilprice.com/Energy/Energy-General/US-Oil-Storage-May-Have-Room-For-Several-Hundred-Million-Barrels.html