US reportedly to loan about a third of heating oil reserve in bid to tame prices
USO•The US Energy Department will reportedly loan 300,000 barrels from the 1-million-barrel emergency heating oil reserve to four companies, with deliveries scheduled by November 6, in an effort to counter surging prices before winter.
1. Reserve fuel loan
The US Energy Department said it would loan 300,000 barrels of fuel oil from the Northeast Home Heating Oil Reserve to four companies to counter surging prices before winter. The amount is nearly a third of the reserve’s 1 million barrels, and transfers or deliveries from storage sites in Boston and New Haven are scheduled to be completed by November 6.
2. Repayment terms
Global Companies LLC, Sprague Operating Resources LLC, Trafigura Trading LLC and Vitol Inc will have to return the same amount of fuel oil with an additional premium, the department said. Under Secretary Kyle Haustveit said the actions would help address supply chain disruptions and maintain the reserve’s long-term readiness.
3. Reserve history
The US has tapped the reserve once before, after Hurricane Sandy struck the region in 2012. About one-third of New England homes and about half of homes in Maine use heating oil.
