President Biden confirmed Wednesday he will authorize the release of another 15M barrels of crude oil from the U.S. Strategic Petroleum Reserve and may make further oil purchases and withdrawals in an effort to target a "good price" for oil producers and consumers.
The administration will seek to repurpose the SPR - which holds 405M barrels of crude and currently is 57% full - as a tool to moderate oil price volatility, and it plans to replenish the reserve by initiating purchases when WTI crude prices are at or below $67-$72/bbl.
"Refilling the reserve at $70/bbl is a good price for companies and it's a good price for taxpayers," the president said.
Oil industry officials worry the latest emergency release, along with other SPR sales and purchases, create the risk of masking valuable price signals in the energy markets.
"The SPR was never meant to serve as a substitute for actual crude oil production," American Fuels & Petrochemical Manufacturers CEO Chet Thompson said, adding SPR releases are a short-term fix "at best."
Biden also reiterated calls for oil companies to lower their profit margins and pass savings along to consumers, a call he has made frequently.
"My message to American energy companies is this: You should not be using your profits to buy back stock or for dividends," Biden said. "Not now, not while a war is raging" in Ukraine.
The White House has not ruled out an export ban on some petroleum products, citing concerns about low inventories of diesel fuels - just 25 days of supply, the lowest since 2008 - although Amos Hochstein, Biden's top energy advisor, downplayed the ban as an imminent step.
WTI crude oil futures snapped a three-day losing streak Wednesday, with the front-month contract settling +3.3% at $85.55/bbl, as U.S. government data showed declines in domestic crude and gasoline supplies.