Government weighs renting petroleum reserve space to producers: reports

The Energy Department could rent space in the Strategic Petroleum Reserve to oil producers, according to reports from Bloomberg and The Washington Examiner.

People familiar with matter told the news outlets of the possibility to help producers who are low on space and cannot sell their product. 

The oil industry is facing plunging prices due to a decrease in demand because of the coronavirus outbreak and an increase in supply linked to international disputes involving Russia and Saudi Arabia. 

Oil prices were about $21 per barrel Wednesday afternoon, down from a high of $53 per barrel in February. 

The Energy Department did not respond to requests for comment from The Hill. 

The Strategic Petroleum Reserve is an emergency supply of crude oil established to lessen the impacts of international supply disruptions of petroleum products. It can hold up to 77 million more barrels of oil than it is currently storing. 

The reports follow a thus-far unsuccessful attempt by the administrator to purchase oil for storage at the facility.

The Energy Department last week withdrew a request to purchase 30 million barrels of oil, which would boost the industry, after Congress declined to include funding for the purchase in a coronavirus stimulus package.