Bidding begins for oil reserves

Refiners have through Friday to vie for 30M barrels of crude from the U.S. emergency stockpile.

WASHINGTON (Reuters) – Hurricane-hit refiners have until Friday afternoon to submit bids for 30 million barrels of crude oil offered for sale from the government’s emergency stockpile, the Energy Department said Tuesday.

The sale was expected to help calm crude oil prices, which roared to a record high of $70.85 a barrel last Tuesday, soon after Hurricane Katrina slammed into Louisiana and Mississippi last week.
U.S. crude prices dropped by nearly $2 a barrel Friday after the Bush administration announced it would offer 30 million barrels of crude to the market, and settled at $67.57 a barrel. Prices closed at $69.47 Thursday, a day after Energy Secretary Samuel Bodman said the White House would loan crude from the nation’s Strategic Petroleum Reserve to refiners hurt by Hurricane Katrina.

…But the pressing issue for the U.S. market is gasoline more than crude oil, so “this isn’t really that much what the market needs,” said Jamal Qureshi, an analyst with PFC Energy in Washington.

Reuters