Here's how much oil the US is buying to refill the depleted emergency reserve
Story by fdemott@insider.com (Filip De Mott) •
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The US is looking to buy 3 million barrels of oil for March 2024 to replenish the Strategic Petroleum Reserve.
The government is working to refill the emergency stockpile while oil prices are low.
But there is a limit to how much oil the SPR can physically take at a time.
Additionally, oil prices have soared 27.5% since July, including 7.7% in September, as supply cuts rattle the market. Goldman Sachs strategists believe Brent oil prices will climb from $93 per barrel to $100 in the next year, which would further squeeze both individuals and businesses alike.
"Higher oil prices represent a headwind to consumer stocks and companies that use oil as a major input," Kostin wrote. "Higher oil prices act as a tax on the consumer and lead to less spending on other discretionary purchases."
If oil stays elevated, inflation could also persist longer than expected as firms seek to pass on those costs to customers. That may force the Fed to keep interest rates high, which would put even more upward pressure on bond yields and worsen the market selloff.
The US issued a new solicitation to purchase up to 3 million barrels of oil for March, in an effort to keep replenishing the Strategic Petroleum Reserve.
SPR levels continue to stand near 40-year lows, currently holding 352 million barrels of oil. The emergency stockpile was tapped at historic rates by the Biden administration last year to stabilize oil prices after Russia's invasion of Ukraine.
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