March 16, 2020 – Politico
Trump pulled back into oil-ethanol fight
By KELSEY TAMBORRINO
SLOW BOAT FOR SPR PURCHASES? Oil prices rose on Friday's announcement that the Energy Department would purchase oil for the Strategic Petroleum Reserve, but it is not the panacea the oil industry needs to weather the current storm. A Twitter thread among energy wonks this weekend questioned whether the DOE's promise to buy "American-made" oil would force it to stick to buying the light, sweet oil prevalent in the U.S., given that some of the space in the SPR might be outfitted to handle other varieties the country normally imports. DOE did not reply to questions over the weekend. Even if the oil purchases have to go the America First route, companies could use swap trades to ensure the SPR was filled as much as possible, analysts said. DOE could start buying oil for the SPR in two weeks, according to a Bloomberg report citing a senior department official.
Once purchases begin, filling the 77 million barrels would take at least six months and possibly a year, RBN Energy CEO Rusty Braziel told ME. But it's still an open question as to when DOE might be able to make the purchase, given that it would also likely have to go to Congress to foot the expected bill of roughly $2.7 billion, ClearView Energy analyst Kevin Book wrote in a client note. "If, as we believe, the DOE must go to Capitol Hill to execute the President's directive, we continue to anticipate push back from fossil fuel skeptics on Capitol Hill," Book said. "If fossil foes do not agree to a deal to purchase SPR crude, we would not rule out an interim outcome that legislative delays or halts congressionally mandated SPR sales beyond the end of FY 2020."
Read the full article here: https://www.politico.com/newsletters/morning-energy/2020/03/16/trump-pulled-back-into-oil-ethanol-fight-786090
