US 'could sell crude oil reserves for 18 months'

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US 'could sell crude oil reserves for 18 months' By Nancy Dunne in Washington Published: September 27 2000 23:01GMT | Last Updated: September 27 2000 23:15GMT

The US has enough crude oil in the Strategic Petroleum Reserve to put 1m barrels of crude oil a day - the current rate of release - on the market for the next 18 months, a senior Energy Department official said on Wednesday.

Robert Kripowicz, an assistant secretary for energy, told the Senate-House joint economic committee that, if necessary, the reserve could also supply oil to commercial buyers at a rate of 4.1m barrels a day for 90 days.

"During this time the reserve would be the equivalent of the fifth largest oil-producing country in the world," he said.

Mr Kripowicz was describing the workings of the SPR to the congressional joint economic committee amid controversy over President Bill Clinton's decision last week to move 30m barrels from the US stockpile.

The president on Wednesday said he acted only after it became clear that actions by Opec would not bring crude oil prices to a target range of $22 to $28 a barrel.

At Wednesday's hearing Senator Connie Mack, a Florida Republican, described Mr Clinton's decision as "slippery economics" which "injects politics where it doesn't belong". Other Republicans were on Wednesday discussing measures to halt the stockpile swaps, but with time short in the congressional session, this move seemed likely to end in failure.

Mr Kripowicz said bids for the reserve's oil were due on Friday, and contracts will be awarded on October 6 to companies that offer to return the most crude oil of a comparable or higher grade next August through November.

Thanks to past co-ordination with the nation's refineries, the department can complete the bid process and be ready to deliver within 15 days. In 1991, during the Gulf war, the Energy Department offered nearly 34m barrels and sold about 17m barrels.

Mr Kripowicz urged re-authorisation of the reserve past the current fiscal year. "It is important that there be no ambiguity about the president's ability to use the SPR in the future," he said.

The House has acted twice to renew the legislation, but the Senate has not moved. With energy futures bouncing around on Wednesday, a senior energy official said the US would not press other countries to release stocks when the International Energy Agency meets on October

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3XAP0LNDC&live=true&tagid=ZZZOMSJK30C&subheading=US

-- Martin Thompson (mthom1927@aol.com), September 27, 2000

Answers

Empty words.

Think Refinery.

No new refineries for 25 years. 36 refineries shut down over the past 20 years. Refineries running at 93+ capacities now. Maintenance way over due for all refineries. Refineries have to be retooled for this particular oil.

Opec keeps hammering that it is a refinery problem and they are correct.

-- Martin Thompson (mthom1927@aol.com), September 27, 2000.


Great analysis of your own posted story, Martin. That's it, right on the head.

-- Chance (fruitloops@hotmail.com), September 28, 2000.

I find it most interesting that in the Gulf War period, 1991, when 34 million barrel were offered from the petrol reserve, only half that amount was taken.

I wonder why? And, with the problems cited by Martin, would there even be that many takers?

-- Loner (loner@bigfoot.com), September 28, 2000.


It's the overdue maintenance that bothers me the most. Early this year Richardson twisted arms and got many refineries to postpone, postpone, postpone.

Refinery work can be very dangerous. I hope lives have not been unnecessarily put on the line.

-- Welesley (wellesley@freeport.net), September 28, 2000.


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