The Department of Energy said yesterday it had accepted bids totaling $143.5 million for nearly 4 million barrels of crude oil being sold from the nation's Strategic Petroleum Reserve (SPR) under the first test of the emergency oil stockpile.
Eleven firms, most of them major oil companies or refiners, won the bidding, led by Chicago-based Amoco Corp., which bid $43.3 million for the 1.12 million barrels it will receive. Other winning bidders included BP Oil Supply Co., Citgo Petroleum Corp., Mobil Corp. and Marathon Petroleum Co. There were 33 bidders for the oil.
The SPR contains a total of 590 million barrels of oil, or enough to substitute for U.S. oil imports for about 75 days.
The announcement of the acceptance of the bids came as the price of oil hit a record high on the New York commodities market before ending the day with a sharp loss.
The price of a benchmark barrel of high-quality crude closed down $1.71 yesterday, to $38.69 a barrel, for November delivery on the New York Mercantile Exchange after trading as high as $41.14 earlier in the day.
The average accepted bids for the oil from the strategic reserve ranged from $32.64 a barrel to $39.06, depending in part on the quality of the oil, but a complicated indexing process will adjust the price to market conditions when it is actually delivered to the oil companies.
The DOE said that the oil could be pumped out of the strategic reserve -- which is held in salt caverns in Louisiana and Texas -- for shipment as early as Saturday, but an official said that because of shipping and pipeline schedules, most of the oil probably will not be delivered until next month.
The test was supposed to involve the sale of 5 million barrels, but the DOE did not receive bids on 800,000 barrels of low-quality crude involved in the test, and it did not receive high enough bids for 300,000 more barrels of low-quality crude.
The U.S. government will make a profit of around $10 a barrel on the oil from the reserve, which it bought at an average of $27 a barrel.
The DOE said proceeds from the sale will go to the Treasury and may be used to buy replacement oil "when markets stabilize."