US government has returned all the oil it stored for companies when prices crashed last year

Market Insider

Welders work on the Strategic Petroleum Reserve pipeline on June 1, 1980, in West Hackberry, Louisianna. Begun under President Ford to reduce the threat of oil embargoes, the SPR crude oil is stored in huge underground salt caverns along the Gulf of Mexico, a natural choice due to the proximity of many refineries and distribution points.
Robert Nickelsberg/Liaison

The U.S. has returned 18.3 million barrels of oil temporarily stored in the Strategic Petroleum Reserve by energy companies that had rented space there when prices were crashing last year.

Oil prices briefly turned negative last year in an unprecedented period of volatility after the economy shut down and demand dried up.

On April 2, 2020, the Department of Energy said it would offer oil companies 30 million barrels of space.

The agency later announced it had rented space to nine companies for 23 million barrels of crude. The government charged them rent in oil.

When the announcement was made, oil was trading in the $20s per barrel, but less than three weeks later, West Texas Intermediate futures were negative by more than $37 per barrel.

Under the agreement, the oil was to be removed by March 31.

An Energy Department spokesperson told CNBC Tuesday that all of the oil was returned except for 1.2 million barrels paid as rent and another 1.5 million being held under a lease deal with the government of Australia.

Australia purchased the oil from a company that participated in the storage program.

The companies that stored oil in the reserve include Chevron, Exxon Mobil, Energy Transfer, Equinor Marketing and Trading, Mercuria Energy, MVP Holdings, Vitol, Atlantic Trading and Alon USA.

The current inventory in the Strategic Petroleum Reserve is 638.1 million barrels. The Energy Department expects the reserve to have 628.1 million barrels at the end of May, following a Congressionally directed sale of 10 million gallons.

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