Yahoo Finance Biden To Replenish Oil Stockpile with 3 Million Barrels — How It Could Affect Gas Prices
The Biden administration announced plans to replenish America’s oil stockpile with three million barrels of crude oil. This could affect what you pay at the pump, but this depends on what the U.S. Department of Energy (DOE) pays to fill reserves.
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President Biden drained the Strategic Petroleum Reserve (SPR), the world’s largest supply of emergency crude oil to combat rising gas prices last year. When Biden took office in Jan. 2021, the reserve held around 638 million barrels of oil, according to the U.S. Energy Information Administration and as reported by CNN. But now, it’s down to 362 barrels — the lowest since Oct. 1983.
Per CNN, the DOE said purchasing 3 million barrels of oil is an opportunity to replenish reserves at a “good deal” for taxpayers, pointing out that today’s prices are much lower than the $96 per barrel average price it was sold for.
CNN noted that oil prices are currently around $71 per barrel, but the administration is waiting to start repurchasing oil for the SPR when prices are at or below $67 to $72 a barrel.
“I think as we get into the early fall, if prices are in the right place, we are still 100% committed to replenishing the SPR over a period of time,” said Amos Hochstein, the special presidential coordinator for global infrastructure and energy security, as quoted by Bloomberg.
According to USA Facts, crude oil prices are only one factor that affect gas prices. Taxes, marketing, transportation and more also contribute to the price of a gallon of gas. Historically, crude oil accounts for 40% to 70% of the cost of gasoline.
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GasBuddy data shows that the national average on gas prices is down 14.9 cents from last month and 95.6 cents per gallon lower than a year ago. GasBuddy experts don’t expect prices to hit the $4 per gallon mark anytime soon, which should provide motorists with some relief this summer.
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This article originally appeared on GOBankingRates.com: Biden To Replenish Oil Stockpile with 3 Million Barrels — How It Could Affect Gas Prices
