WASHINGTON (Reuters) – The U.S. energy secretary said on Tuesday he would talk with leaders in the U.S. House of Representatives later in the day and urge them to fund the purchase of crude to fill the emergency oil reserve.
In March, President Donald Trump ordered Energy Secretary Dan Brouillette to fill the Strategic Petroleum Reserve, or SPR, to the top as the price of oil plunged while the coronavirus crushed global demand. So far, Congress has declined to fund the purchase, with some Democrats opposed to bailing out the oil industry.
“I’m going to meet with leaders later today in the U.S. House to discuss exactly this,” Brouillette told Fox Business Network in an interview cut short due to problems with the audio feed. The House is controlled by Democrats.
The reserve, held in salt caverns in Texas and Louisiana, currently holds about 635 million barrels and can take another 77 million barrels of oil, or less than what the United States consumed on average in four days in 2019.
As the Energy Department works with Congress on a purchase it also is moving forward with a plan to rent an initial 23 million barrels of storage space in the reserve to oil companies.
Brouillette said the SPR is legally mandated to expand to 1 billion barrels. But expanding the reserve to that level would likely require even more cooperation on funding from Congress.
The June contract for U.S. crude was down nearly 30% below $15 a barrel on Tuesday after hitting $11.79, its lowest since 1999. [O/R] The expiring May contract fell to below minus $40 per barrel on Monday as the industry scrambled for places to store oil.
(Reporting by Timothy Gardner)