What happened
Friday wasn't the ideal day to be in the oil business. The all-important price of crude tumbled, on the back of general economic worries and a U.S. government decision about its Strategic Petroleum Reserve (SPR). The performance of bellwether industry stock ExxonMobil (XOM -0.84%) reflected the situation; it closed the day essentially flat over Thursday's closing price, while the S&P 500 index enjoyed a nearly 0.6% bump.
So what
The influential party pooper in this case was U.S. Energy Secretary Jennifer Granholm, who on Thursday admitted that it could take years for the country to refill the SPR.
In a congressional hearing, Granholm told lawmakers: "This year, it will be difficult for us to take advantage of this low price. But we will continue to look for that low price into the future because we intend to be able to save the taxpayer dollars."
Under initiatives directed by President Biden, sales from the SPR pushed it to its lowest level since 1983. Those sales totaled a record 180 million barrels in 2022. The average sale price was roughly $94 per barrel; today, a barrel can be had for less than $70.
At the end of last year, following that big sell-off, the Energy Department said it would begin buying back oil to fill in the SPR.
Now what
The SPR consists of four storage sites in the Texas and Louisiana Gulf Coasts. All told, it has total capacity of 727 million barrels. That is a great deal of oil, so what happens with the SPR matters. Energy sector investors generally and ExxonMobil shareholders specifically would do well to keep an eye on its developments in the weeks and months ahead.
