The Department of Energy said Friday it has finished buying oil to replenish the Strategic Petroleum Reserve with the latest purchase of 2.4 million barrels.
The DOE directly bought 59 million barrels of oil at an average price below $76 a barrel, compared with around $95 a barrel received for emergency sales in 2022 following the Russian invasion of Ukraine.
The department said that, counting the cancellation of 140 million barrels of mandated sales from the reserve for fiscal years 2024 through 2026, it has secured 200 million barrels for the SPR. The DOE sold 180 million barrels under the 2022 emergency declaration.
"This is smoke and mirrors to make it look OK," said Phil Flynn, senior markets analyst at the Price Futures Group. "From an oil-price standpoint, initially this is bearish because the market was under the assumption that over time the government was going to end up buying this back. Obviously they're not going to replace the oil."
The SPR held 387.2 million barrels of oil at the start of November, according to the U.S. Energy Information Administration, compared with 638.1 million barrels at the start of the Biden administration.
The DOE said Friday that the sale of oil from the reserve in 2022 "calmed global markets and protected American business and consumers with a reliable supply of fuel." It said the sales in 2022, along with releases from reserves in other countries, lowered gasoline prices by as much as 40 cents a gallon according to a Treasury Department analysis.
The department added that it has used all the funds allocated for crude purchases.
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