Energy companies have begun taking back millions of barrels of oil from the U.S. government’s emergency stockpile after renting storage in the facility to help manage a glut of crude this spring after energy demand collapsed during COVID-19 lockdowns, a Department of Energy website showed on Monday.
FILE PHOTO: The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees LatifSince Aug. 1, the companies have taken back 2.2 million barrels of oil of the 23 million barrels they agreed to store in the Strategic Petroleum Reserve, or SPR, from April through June. The companies have until March 31, 2021 to take back the oil after renting the space for a small fee.
Nine oil companies including Exxon (XOM.N), Chevron (CVX.N) and Alon USA rented the space from the reserve, a series of underground salt caverns on the Texas and Louisiana coasts, an Energy Department official said in April.
An oil trader said that at least two companies, Exxon and Atlantic Trading & Marketing Inc (ATMI), a U.S arm of French oil major Total SA (TOTF.PA), had taken back the 2.2 million barrels.
The taking back of the oil from the SPR might slow commercial inventory drawdowns as companies prioritize selling the barrels, market sources said.
Exxon had won the lion’s share of the total space while ATMI had won about 600,000 barrels of storage space, another trade source said.
Exxon did not immediately comment and an ATMI spokeswoman declined to comment.
Oil prices collapsed in the spring due to the pandemic’s crushing of fuel demand at the same time that major crude producers Saudi Arabia and Russia engaged in war over oil market share.
President Donald Trump tried to help domestic oil producers manage the oil price hit by ordering Energy Secretary Dan Brouillette to fill the SPR to the top, or purchase about 77 million barrels of oil. But Congress failed to fund that order, leaving the department with little choice but to rent space in the facility.
(This story has been refiled to fix typographical error in headline)