Frustrated at the gas pump? You’re not the only one. There is a new update on the SPR, or Strategic Oil Reserve, this s used for war or emergencies. The Biden administration has cancelled SPR replenishment purchases, citing high prices.
In canceling the SPR purchase, the Energy Department said it was “keeping the taxpayer’s interest at the forefront” of its buyback plan, which is to refill the depleted reserves so long as prices remain below $79 per barrel. As of today we have only 17 days of emergency fuel.
In October, it announced a buyback plan targeting oil prices of between $67 to $72 per barrel to replenish the SPR, which it later raised to $79. In its most recent refill, last month, the department exceeded those prices— spending an average of $81 per barrel to replenish the reserves.
In its most recent refill last month, the department exceeded those prices — spending an average of $81 per barrel to replenish the reserves. The SPR currently stands at around 363 million barrels, according to data from the Energy Information Administration, down from the start of 2022, when levels stood at around 600 million barrels.
Some analysts see oil heading much higher over the summer. JP Morgan said it now expects Brent prices to rise to $90 per barrel by May and $100 per barrel by September.
There is more to this story and it impacts the cost of gasoline at the pump. Let’s look deeper into the US Petroleum Reserve requirements and regulations. On page 441 of the 1,050-page "Government emergency funding bill" it says that the US must sell the US petroleum reserve, and close it forever in the "NorthEast". This is very concerning in case of an emergency.
The bill makes it understood that the current administration knows electric vehicles will never compete with gasoline with consumers, buyers should be able to buy whatever works for them. The bill is a sabotage to our oil and gasoline supplies. Let me prove it to you.
SEC. 308. Notwithstanding sections 161 and 167 of the Energy Policy and Conservation Act (42 U.S.C.6241, 6247), the Secretary of Energy shall draw down and sell one million barrels of refined petroleum product from the Strategic Petroleum Reserve during fiscal year 2024. All proceeds from such sale shall be deposited into the general fund of the Treasury during fiscal year 2024. Upon the completion of such sale, the Secretary shall carry out the closure of the Northeast Gasoline Supply Reserve. If you missed the impact of this, rewind and listen to this again.
The Secretary of Energy may not establish any new regional petroleum product reserve unless funding for the proposed regional petroleum product reserve is explicitly requested in advance in an annual budget submitted by the President pursuant to section 1105 of title 31, United States Code, and approved by the Congress in an appropriations Act. The budget request or notification shall include the justification for the new reserve.
On March 3, 2024, (U:\2024OMNI\HMS31169.xml SEN.APPRO. 442), this was posted.The cost estimate for the establishment, operation, and maintenance of the reserve, including funding sources; a detailed plan for operation of the reserve, including the conditions upon which the products may be released; the location of the reserve; and the estimate of the total inventory of the reserve.
SEC. 309. None of the funds made available by this Act may be used to draw down and sell petroleum products from the Strategic Petroleum Reserve (1) to any entity that is under the ownership, control, or influence of the Chinese Communist Party; or (2) except on condition that such petroleum products will not be exported to the People’s Republic of China.
Prices at the pump typically rise in the first half of the year as more Americans get back on the road and refiners transition to less-polluting summer blends. But costs in 2024 have ramped up faster than normal.
Bets by energy investors on Wall Street suggest that the price gains have room to run. The cost of gasoline shipments into New York Harbor next month has jumped 31% since the beginning of the year. That is faster than the average increase of 20% during the same period over the past quarter-century, according to FactSet.
Record American crude oil output in 2023 surprised forecasters, and kept prices in check. This year, production cuts by members of the Saudi and Russia-led OPEC+ cartel have helped push up the price of U.S. crude by 16%, to over $83.00 a barrel.
Gas prices typically rise in the spring, reaching a peak in the summer when the demand is high and gasoline formulations are more expensive, per the U.S. Energy Information Administration. You’ll be charged even more to fill your tank when summer blend gasoline hits the pumps. This type of gasoline is formulated to prevent excessive evaporation when temperatures warm.
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Lauren Fix, The Car Coach is a nationally recognized automotive expert, media guest, journalist, author, keynote speaker and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and safety issues for both the auto industry and consumers. Her analysis is honest and straightforward.
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