The U.S. Energy Department said Thursday that it will buy 77 million barrels of oil to fill the nation's strategic petroleum reserve as crude prices hover near two-decade lows.
The Energy Department said it will buy an initial 30 million barrels of oil for the SPR, the world's largest emergency reserve with a 713.5 million storage capacity, before adding another 47 million barrels purchased on the open market.
“DOE is moving quickly to support U.S. oil producers facing potentially catastrophic losses from the impacts of COVID-19 and the intentional disruption to world oil markets by foreign actors,” said Energy Secretary Dan Brouillette.
Brent crude futures contracts for May delivery, the global benchmark, were last seen $2.07 higher from their Wednesday close in New York and trading at $26.95 per barrel following the Energy Department statement, while WTI contracts for April delivery were marked $3.80 higher at $24.17 per barrel.
Last week, President Donald Trump instructed the Energy Department to "purchase, at a very good price, large quantities of crude oil for storage in the U.S. strategic reserve", telling reporters at the White House he was going to "fill it right to the top".
Oil prices suffered the biggest decline on record Wednesday, pulling U.S. crude prices to the lowest levels in 18 years, as travel restrictions, manufacturing sector shut-downs and a looming global recession hammer demand prospects.
Saudi Arabia, the world's second-largest producer behind the United States, is also set to pump a record 12.3 million barrels of crude each day, starting next month, following the collapse of its output limit agreement with OPEC cartel members and Russia earlier this month in Vienna.