U.S. crude in Strategic Petroleum Reserve hits lowest level since January 1985

HOUSTON, Aug 22 (Reuters) – U.S. crude inventory in the Strategic Petroleum Reserve (SPR) fell by 8.1 million barrels in the latest week to the lowest level in more than 35 years, according to data from the Department of Energy.

Stockpiles in the Strategic Petroleum Reserve (SPR) fell to 453.1 million barrels in the week to Aug. 19, according to the data. The 8.1 million-barrel draw was the largest since the end of April and brought inventory to the lowest level since January 1985.

The large draw comes after a few weeks of smaller releases. An Energy Department spokesperson said the use of an additive to cool crude for transportation had slowed deliveries in recent weeks, adding that deliveries for August are being released according to schedule.

President Joe Biden in March set a plan to release 1 million barrels per day over six months from the SPR to tackle high fuel prices, which have been contributing to soaring inflation.

The SPR stocks have also declined due to sales from congressional mandates and Biden’s price initiative. The oil is sold to accredited oil companies via online auctions, and prices are set using a five-day average bracketing the date of delivery.

The Energy Department has proposed to replenish the SPR by allowing it to enter contracts to purchase oil in future years at fixed, preset prices. The administration said it believes the plan would help boost domestic oil production.