Trump administration not planning further relief for US oil sector: report

Washington — The Trump administration is not planning additional financial relief measures to help the ailing oil and gas sector beyond continuing to push Congress to buy crude to fill the Strategic Petroleum Reserve and allowing drillers to apply for a Federal Reserve lending program, US Energy Secretary Dan Brouillette told Axios Wednesday.

"For the time being, the first steps we've taken are going to be what we do," Brouillette said, according to the report. "I'm not anticipating any broad strokes here beyond what we've already done."

Brouillette expressed optimism about building support in Congress for funding to fill the SPR in future stimulus legislation.

Separately Wednesday, DOE announced a request for proposals to buy up to 1 million barrels of sweet crude to "test the oil market." The oil is for delivery to the SPR in July, with early deliveries accepted in June.

"This crude oil purchase will serve as a test of the current conditions of physical crude oil available to the SPR, as opposed to the financial market trading WTI NYMEX futures contracts," DOE said in a statement. "This purchase complements deliveries of crude currently scheduled for June or July under DOE's crude oil storage initiative, which was launched in April."

DOE is accepting bids for the SPR purchase until May 27 and will award contracts by May 29.

A DOE spokeswoman did not immediately respond to a request for comment on Brouillette's comments or the test purchase.

SPR STOCKS GROW

In March, Democrats easily blocked the Trump administration's request for $3 billion to buy US crudes to fill the government's emergency oil stockpile. DOE then switched to a plan of renting out space to oil companies.

Nine companies negotiated to store a total of 23 million barrels in the government stockpile located at four sites on the Gulf Coast. Renters include Chevron, ExxonMobil, Energy Transfer, Vitol, Atlantic Trading, Alon USA, Equinor Marketing & Trading, Mercuria Energy America, and MVP Holdings.

SPR stocks grew 4.8 million barrels in the four weeks ended May 8, according to the latest Energy Information Administration data. With current authorized capacity of 714 million barrels, the stockpile has room for another 74.2 million barrels.

US commercial crude stocks declined 750,000 barrels during the week ended May 8 to 531.48 million barrels, US Energy Information Administration data showed Wednesday. The draw snapped 15 consecutive weekly builds, which resulted in over 100 million barrels entering storage since mid-January.

But the draw failed to meaningfully alter the US oversupply picture, as stockpiles remained about 11.4% above the five-year average, unchanged from the week prior.

The renters will be able to receive their barrels back through March 2021, "minus a small amount of oil" to cover storage costs, DOE said.