The U.S. Strategic Petroleum Reserve is at a 12-year low after the Department of Energy made deliveries of volumes sold earlier this year, Bloomberg reported. According to the Department of Energy, at of June 30, the SPR had 682 million barrels of crude in it, after more than 10 million barrels were sold over the first five months of the year.
Yet, there is no cause for concern: shale production, according to energy analysts, has created a comfortable cushion against potential shortages, and the U.S. simply does not need to store as much petroleum as it once did.
“You only need 60 days of your net import of crude and products in the emergency stockpiles,” Macquarie Capital analyst Vikas Dwivedi told Bloomberg. “Given the fact that we don’t net import that much any more, we only really need 300 million barrels.”
Daily U.S. oil imports for the week to June 23 averaged some 8 million barrels, and 8.1 million bpd was the average for the last four weeks, according to the Energy Information Administration’s last weekly petroleum data report.
Total oil and product imports stood at 9.83 million bpd. Exports of crude and products averaged 5.6 million. Net crude oil and products imports for the week to June 23 stood at 4.23 million barrels. According to Bloomberg, this compared with a high of 14.4 million barrels daily in November 2005.
According to the Department of Energy, the SPR was at its highest at the end of December 2009, holding 727 million barrels of crude – equal to the capacity of the four storage sites.
Earlier this year, at the presentation of his draft budget for 2018, President Trump included a proposal for the sale of around half of the SPR, for proceeds estimated at US$16.6 billion over a period of 10 years. If the shale industry continues to pump at a growing rate, a 50-percent reduction in the strategic petroleum reserves over a decade would hardly be felt.
By Irina Slav for Oilprice.com
