Once I ran to you (I ran) Now I’ll run from you, this tainted crude you’ve given. I give you all the reserve could give you.
Take my oil and that’s not nearly all, oh tainted crude, tainted crude. Take my tears and that’s not nearly all, Oh tainted crude.
Is oil From the US Strategic Petroleum Reserve (SPR) tainted?
One of the factors keeping US oil supplies from falling further below normal than they already are has been sales from the US Strategic Petroleum Reserve (SPR). Yet a recent report shows that some of that SPR oil may have gone bad. Reuters is reporting that three firms that bought crude oil last year from U.S. emergency stockpiles raised concerns about dangerous levels of a poisonous chemical in the cargoes, according to internal Energy Department emails and shipping documents reviewed by Reuters.
This comes just one day after the SPR announced another big 7-million-barrel sale from the SPR to at least at least five different companies, rumored to be Atlantic Trading & Marketing, Phillips 66, Marathon Petroleum, Motiva, and Trafigura, according to Platts sources.
The problem with this report is that if US SPR oil is tainted in some way, it is possible that they may not be able to sell more oil to the refiners until they get the problem cleaned up. That potentially could tighten US oil supply even more. US oil supplies are below normal, and many refiners have had their fill of the light oil that the frackers want to sell. We will contact SPR today and try to get more details, but this is a story to watch.
Yesterday, oil was watching the stock market and the dollar. Oil tried to rally on a crude report that was bearish on the headline number but masking very bullish undertones. Strong refiner demand and a big drop in gasoline supply was supportive but was not enough to overcome an uncertain stock market and the strong dollar. The bottom line for the crude market is that crude supplies are below normal for this time of year and demand is above normal. We can let the market figure out the rest, but this is a bullish situation.
