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Economy 3 hours ago (Sep 08, 2022 05:50PM ET)
© Reuters. FILE PHOTO: A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson
By Arathy Somasekhar
HOUSTON (Reuters) -U.S. President Joe Biden’s administration is weighing the need for further releases of from the nation’s emergency stockpiles after the current program ends in October, Energy Secretary Jennifer Granholm told Reuters on Thursday.
A Department Of Energy official later said the White House was not considering new releases from the U.S. Strategic Petroleum Reserve (SPR) at this time beyond the 180 million barrels that the president announced months ago.
The Biden administration this year has delivered about 1 million barrels of oil per day from SPR stockpiles to lower fuel prices and pare energy inflation ahead of midterm elections in November.
The releases so far this year have helped knock average U.S. retail gasoline prices down to $3.75 a gallon this week from $5 a gallon in June. But they also have cut U.S. emergency stocks to below 450 million barrels, lowest since 1984.
OPEC and its allies led by Russia on Monday agreed to a small oil production cut beginning next month to bolster prices that have slid on fears of an economic slowdown.
It is “a little early to say to say that there is going to be more SPR releases,” said Abhiram Rajendran, head of global oil at Energy Intelligence. “But if OPEC starts getting aggressive on cutting supply, that’s a possibility.”
The nation’s overall crude stocks have been declining since mid-2020 due to sales from congressional mandates and Biden’s price initiative.
Without the SPR releases, U.S. commercial crude oil inventories “would be much lower than they are and they are already below average,” said Phil Flynn, an analyst at Price Futures Group.
Granholm also said during a visit to Houston on Thursday that the administration and allies are still discussing a cap on prices for Russian oil purchases. A price cap would restrict revenues available to Russia amid its invasion of Ukraine.
The administration has not ruled out a U.S. fuel export ban, but said it is “certainly not something on top of the list,” she said.
Granholm recently wrote to U.S. refiners urging them to replenish low fuel inventories ahead of winter and to curb rising exports of gasoline and diesel. The letter warned the administration may take unspecified emergency measures if fuel stocks fell further.