Trump reiterates plan to fill US SPR, but legislative outlook remains uncertain

Washington — US President Donald Trump said Monday he still plans to fill the Strategic Petroleum Reserve to take advantage of record-low oil prices, but he gave no new details on how the administration would buy the crude without approval from Congress.

A dire lack of US oil storage capacity led Monday to the expiring front-month NYMEX WTI contract settling in negative territory at minus $37.63/b, down $55.90/b from Friday. The contract had never before traded in negative territory, and the previous record low front-month settlement was $10.42/b on March 31, 1986.

After Monday's selloff, Trump said oil prices were "at a level that's very interesting to a lot of people."

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"We're looking to put as much as 75 million barrels into the reserves themselves, that would top it out," he said during the daily White House briefing. "That would be the first time in a long time it's been topped out. We'd get it for the right price."

Trump did not detail how the government would pay for the crude, after Democrats in March blocked the Department of Energy's plan to buy up to $3 billion of domestic oil to fill the stockpile as part of the latest economic stimulus package.

DOE has since shifted to renting space in the Gulf Coast storage caverns, saying last week that it was negotiating with nine US oil producers to store a total of 23 million barrels for delivery mostly in May and June. The SPR would still have about 55 million barrels of capacity, according to the latest inventory data.

The Trump administration is also reportedly considering virtually expanding the SPR to 1 billion barrels by using legal authority to buy crude production in place.

"However, Congress must provide the funds, an unlikely prospect due to objections from Democrats," said Paul Sheldon, chief geopolitical adviser for S&P Global Platts Analytics. "That said, a compromise on various energy provisions, including SPR funding and incentives for renewables, would not be a total shock. In 2015, a similar deal led to a removal of the US crude export ban, earlier than we expected at the time."