U.S. to sell up to 20 mln barrels of SPR oil

U.S. to sell up to 20 mln barrels of SPR oil

The U.S. Department of Energy said Monday it would sell up to 20 million barrels of crude from the emergency oil reserve to comply with legislation passed in recent years.

Up to 8 million barrels will be offered from the Strategic Petroleum Reserve's (SPR) Bryan Mound, Big Hill and West Hackberry sites, while 1 million barrels will be offered from Bayou Choctaw.

Congress passed legislation in 2015 and 2016 to tap the SPR, held in several salt caverns on the Texas and Louisiana coasts, to fund the federal government, medical research and a modernization of the facility.

The sale complies with the 2015 law that called for the offering of 58 million barrels between 2018 and 2025. The SPR has more than enough crude to meet international supply agreements.

The department said bids must be received by early Aug. 31 and it would award contracts no later than Sept. 13. Deliveries of the oil will take place between Oct. 1 and Dec. 15, Reuters reported.

The added supplies from the sale are expected to weigh on sour crude grades in the U.S. Gulf Coast, traders said. Mars crude, the main sour crude sold in the U.S Gulf Coast market, is already at the lowest levels in about a month on oversupply and slow global demand.