1st Oil Stockpile Auction Draws a Glut of Bidders : Energy: An international agency also plans to proceed with sales of petroleum reserves.
WASHINGTON — The Energy Department’s offering of crude oil from the nation’s strategic stockpile was oversubscribed, with bids for much more oil than was put on the market, the government said Monday night.
Twenty-six companies submitted bids totaling nearly 44.81 million barrels of oil, the Energy Department said.
President Bush on Jan. 16 ordered 33.75 million barrels of oil put on the market as part of a release of inventories coordinated with allies.
The department offered 11.25 million barrels of low-sulfur or “sweet†crude and 22.5 million barrels of high-sulfur or “sour†crude. The department can change the mix of sweet and sour.
The potential buyers requested 27.9 million barrels of sweet crude and 16.9 million barrels of sour crude.
Bids ranged from a low of $18.7793 per barrel for some sour crude to $28.5194 per barrel for some sweet crude.
Final payments by successful bidders will track changes in a special reference price, computed by the department as the average spot price of similar crudes for the five days ending Jan. 15--$28.9033 for sweet crude and $26.1593 for sour. The department did not say when it would decide whose bids would be accepted.
The Strategic Petroleum Reserve, stored in salt domes on the coasts of Louisiana and Texas, contains about 590 million barrels of all, roughly two-thirds of it high-sulfur oil.
Meanwhile, in Paris, the International Energy Agency, the West’s energy watchdog, said Monday that it would proceed with its plan to release 2.5 million barrels per day of oil reserves despite criticism from some oil experts.
The plan, triggered Jan. 17 by the outbreak of the Persian Gulf War, has been criticized by oil analysts and the president of the Organization of Petroleum Exporting Countries as causing a steep drop in oil prices in a market already well supplied.
In a statement, the IEA said its member countries are in the process of implementing the contingency plan.
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