15 companies buy crude from US strategic petroleum reserve

Traders, oil refiners and a pipeline operator are among the 15 companies buying 30.6 million barrels of crude from the United States’ emergency stockpiles, the Energy Department announced Monday.

The government signed 28 contracts to sell the oil at prices ranging from $104.97 to $109.26 per barrel. Barclays Bank nabbed the lowest price in the auction, while San Antonio-based refiner Valero paid the highest for a portion of the crude it bought in the sale.

The government is set to take in about $3.3 billion from the sale.

The Energy Department said in a statement that it is now coordinating with the winning bidders, federal maritime authorities and the Homeland Security Department to arrange for delivery of the crude – including some to companies that have asked to get it this month.

President Barack Obama announced he was releasing oil from the Strategic Petroleum Reserve late last month, offering up half of the 60 million barrels that the International Energy Agency’s 28 member nations committed to put on the market.

Administration officials said the move was essential to restore stability to the market and offset the loss of 1.5 million barrels a day of high-quality light, sweet crude from Libya during the summer driving season.

Republicans have blasted the decision as politically motivated.

Although the announcement initially sent oil prices down, the price of crude has since rebounded. On Monday, benchmark U.S. crude closed at $95.15 per barrel, slightly under the trading price when Obama authorized the sale.

Government officials previously said industry interest in the sale was high, drawing bids for far more oil than was available.

Among those that nabbed the crude are major oil companies – Exxon Mobil Corp., Shell, BP and Conoco- Phillips – as well as independent refiners such as Valero Energy Corp., Tesoro Corp., Murphy Oil Corp., Sunoco and Marathon Corp.

Valero was one of the biggest single purchasers of the stockpiled oil. The company is buying 6.1 million barrels, some for as low as $105.62.

Valero would not disclose specific plans for the crude, but spokesman Bill Day noted that “with the capacity to process 2.6 million barrels per day, Valero can quickly process the crude from this purchase.”

Oil traders also got into the act. For instance, Barclays Bank is buying 200,000 barrels for $21 million; Hess Energy Trading Co. is buying 2 million barrels for $212.6 million; Trafigura is buying 1.1 million barrels for $116.8 million, JPMorgan Chase & Co. nabbed 1.5 million barrels for $158 million; and Vitoil is buying 4 million barrels for $432.2 million.

Plains Marketing, a pipeline operator, also spent $223 million for 2.1 million barrels.

Bidders didn’t say what they planned to do with their oil immediately or how soon it might be refined. Some may put the crude in storage, in anticipation of higher prices.

The government does not bar successful bidders from storing oil for later use or resale. But it does bar them from exporting any of the stockpiled crude unless they return an equal volume of refined product to the U.S.

The big demand for the reserve oil stands in contrast to a lackluster response to the last Strategic Petroleum Reserve auction. After Hurricane Katrina damaged pipelines, offshore rigs and refineries in 2005, the U.S. planned to sell 30 million barrels of crude from the reserve, but ultimately auctioned off just 11 million barrels.

Chron