Refill release

Source: BY MATTHEW CHOI, Politico • Posted: Sunday, May 8, 2022

The Energy Department is planning to refill the Strategic Petroleum Reserve once it completes its biggest ever release to bring more supply to market. Industry analysts urged a quick buyback, saying doing so would ensure future demand and incentivize oil investors to pour more money into production.

Oil investors were badly burned at the start of the pandemic when prices collapsed as demand evaporated, and they are still skittish about investing in new exploration and production with new Covid waves threatening future consumption.

“In addition to securing contracts for future delivery to refill the SPR, this replenishment structure also will help encourage the production we need now to lower prices this year by guaranteeing this demand in the future at a time when market participants anticipate crude oil prices to be significantly lower than they are today,” DOE said in a statement announcing the buyback plan. The purchases would be for deliveries after fiscal year 2023.