Valero, Motiva, ExxonMobil take largest shares of US SPR's May-June sale

The US found buyers for all 30 million barrels of crude offered in the latest Strategic Petroleum Reserve sale, with Valero, Motiva Enterprises, and ExxonMobil securing the largest shares, the Department of Energy said April 21.

The crude is set for delivery between May 15 and June 30.

DOE announced it would offer an additional 40 million barrels of SPR crude May 24 for delivery in June and July.

For the 30 million barrels, DOE received 126 bids from 16 companies. It awarded contracts to 12 companies, with Valero (6.85 million barrels), Motiva Enterprises (4.05 million barrels), and ExxonMobil (3.6 million barrels) taking nearly half of the volume.

The winning bids were not yet released, but NYMEX June WTI rallied April 21 by $1.60 to settle at $103.79/b and ICE June Brent climbed $1.53 to $108.33/b.

More drawdowns ahead

The sale for May and June deliveries includes 8 million barrels of sour crude from Bryan Mound in Texas; 8.7 million barrels of sour crude from Big Hill in Texas; 9.6 million barrels of sour crude from West Hackberry in Louisiana; and 3.7 million barrels of sweet crude from Bayou Choctaw in Louisiana.

The Biden administration committed March 31 to selling an unprecedented 1 million b/d from the US emergency oil stockpile from May through October to rein in gasoline prices that have soared following Russia's invasion of Ukraine.

It is counting 20 million barrels that were sold and already scheduled to be released in May as part of 90 million barrels set for release from May through July. Another 90 million barrels will be offered for delivery in August through October under separate notices of sale, DOE said.

Global SPR flows

Paul Sheldon, chief geopolitical adviser at S&P Global Commodity Insights, expects all of the emergency sales to be fully subscribed, which will trigger 900,000 b/d of net outflows to the market from mid-April through October. Other International Energy Agency countries are set to deliver another 92 million barrels over the same period, raising global SPR flows to about 1.4 million b/d through October.

US SPR deliveries averaged 670,00 b/d in the last week, the highest rate since August 2011, Sheldon said.

The US' 180 million-barrel drawdown would deplete almost one-third of the SPR, reducing it to its lowest level since 1984.

The SPR held 556 million barrels as of April 15, about 55% of it sour crude and 45% of it sweet crude. It is the lowest level since February 2002.