The US government has returned 18.3 million barrels of oil temporarily stored in the Strategic Petroleum Reserve by energy companies that had rented space. The Oil prices turned low last year in an unprecedented period of volatility after the economy was low and demand was less.
The Department of Energy passed a statement that it would offer oil companies 30 million barrels of space. It also added that it had rented space to nine companies for 23 million barrels of crude. The US government charged them to rent oil. At that period oil was trading in the $20s per barrel, but less than three weeks later, West Texas Intermediate futures were down by more than $37 per barrel.
A spokesperson of the US government said that all of the oil was returned except for 1.2 million barrels paid as rent and another 1.5 million being held under a lease deal with the government of Australia. It purchased the oil from a company that participated in the storage program.
Oil snapped a two-day streak of gains alongside a strengthening dollar as near-term risks to the demand recovery emerged ahead of an OPEC meeting this week to decide on output policy. The Futures fell 1.6% Tuesday to below $61 a barrel. An OPEC+ technical panel agreed to revise down the group’s oil-demand estimates for 2021.