The Energy Department announced the sale Wednesday of 11 million barrels of crude oil from its government reserve, about a third of what had been offered to the industry as part of the Hurricane Katrina recovery effort.
The sale from the Strategic Petroleum Reserve indicates that oil companies appear confident of adequate crude oil supplies in the commercial market and did not seek to buy nearly as much as what the government had offered. The oil was sold for a price ranging from $59 a barrel for sour crude to a range of $62 to $66 a barrel for sweet crude.
The purchasers were: BP, 2.7 million barrels; Marathon-Ashland, 2.25 million barrels; Shell, 2 million barrels; Astra Oil Co., 1 million barrels; and Vitol, 3 million barrels.
In the aftermath of Katrina, President Bush opened the government’s oil stockpile because of concern of supply shortages and offered 30 million barrels of crude over a 30-day period. Bids from oil companies were accepted last week.
The sales are in addition to 12.6 million barrels of oil the government has lent six Gulf Coast refineries because of crude shortages caused by the disruption of Gulf oil production by the storm.
In recent days crude oil prices have eased because of the market’s perception of adequate supplies and the fact that the government was ready to make up any shortfall through its stocks.