Energy Department withdraws tender to fill Strategic Petroleum Reserve

By Stephen Cunningham on 3/26/2020

WASHINGTON (Bloomberg) --The Trump administration halted plans to start buying oil to top up the nation’s emergency stockpile after failing to win funding from Congress, throwing a wrench in its most tangible efforts to help struggling drillers cope with the price rout.

The Energy Department said in a notice dated Wednesday that it was withdrawing a March 19 tender for the first part of its plan to purchase 77 million barrels for the reserve.

“The American energy sector is a major driver of our nation’s economy and it is being significantly harmed by the impacts of COVID-19 and international market manipulation,” Shaylyn Hynes, a department spokeswoman, said in an email. “Small to medium size American energy companies and their employees should be provided the same relief being provided to other parts of our economy, and the Secretary calls on Congress to work with the Administration to fund the President’s request as soon as possible.”

Some have suggested that the Energy Department might come up with the money in its own budget to fund the purchase for the government’s petroleum reserve. Congressional appropriators routinely sign off on internal budget transfers requested by federal agencies.

Should funding become secure for the planned purchases, the Department will reissue the solicitation, the DOE statement showed.

West Texas Intermediate crude extended a decline, falling as low as $23.22 a barrel on the New York Mercantile Exchange.

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