The US Department of Energy will sell up to 20 million barrels of crude from the emergency oil reserve to comply with legislation passed in recent years, Report informs referring to Reuters.
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 modernization of the facility.
The department said bids must be received by early Aug. 31, and it would award contracts no later than September 13. Deliveries of the oil will take place between October 1 and December 15.
The added supplies from the sale are expected to weigh on sour crude grades in the US Gulf Coast, traders said. Mars crude, the main sour crude sold in the US Gulf Coast market, is already at the lowest levels in about a month on oversupply and slow global demand.