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InvestmentsU.S. to sell 32 million bbls of mostly sour crude from 4...

U.S. to sell 32 million bbls of mostly sour crude from 4 SPR sites By Reuters

© Reuters. FILE PHOTO: The Bryan Mound Strategic Petroleum (*32*), an oil storage facility, is seen on this aerial {photograph} over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif

By Florence Tan and Arathy S Nair

(Reuters) – The United States has launched an public sale for 32 million barrels of crude from 4 strategic petroleum reserves (SPR) sites to be delivered between late-December and April 2022, the Department of Energy (DOE) mentioned.

The sale of SPR oil, which is especially blended sour crude, is predicted to depress the worth of U.S. sour crude Mars and profit patrons in Asia which processes primarily high-sulphur oil.

The administration of U.S. President Joe Biden introduced on Tuesday it’s going to launch hundreds of thousands of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to strive to cool costs after OPEC+ producers repeatedly ignored requires extra crude.

About 10 million barrels might be made out there from Big Hill and Bryan Mound in Texas, about 7 million barrels from West Hackberry in Louisiana and one other 5 million barrels from Bayou Choctaw in Louisiana, DOE mentioned on its web site.

Deliveries will happen January by April 2022, with early deliveries accepted in late December, it added.

Buyers may have to return the oil at later dates between 2022 and 2024, DOE mentioned.

Companies are required to submit bids on Dec. 6 and contracts might be awarded no later than Dec. 14.

“Spread across four months, this equivalent to a steady 270,000 b/d stream of medium sour grades, direct competition to Mars,” a dealer mentioned, including that the standard of crude to be launched may have API gravity of 31 to 33 levels.

“Overall, very good news for Asian buyers of Mars – already depressed at some -$3.50 per barrels vs WTI, Mars should weaken even further.”

DOE may also announce the sale for up to 18 million barrels of SPR crude no earlier than Dec. 17.

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