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U.S. energy secretary urges refiners not to increase fuel exports

Commodities Aug 27, 2022 02:05PM ET
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© Reuters. FILE PHOTO: U.S. Secretary of Energy Jennifer Granholm speaks during a briefing about the bipartisan infrastructure law at the White House in Washington, U.S., May 16, 2022. REUTERS/Elizabeth Frantz/File Photo
 
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WASHINGTON (Reuters) - The U.S. Energy Secretary urged domestic oil refiners this month to not further increase exports of fuels like gasoline and diesel, adding that the Biden administration may need to consider taking action if the plants do not build inventories.

U.S. refiners have boosted oil product exports this month as domestic crude oil production rose and global fuel demand continued to recover.

Energy Secretary Jennifer Granholm, in a letter sent Aug. 18, urged seven refiners including Valero, ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX), to build supplies of fuels as the United States enters peak hurricane season.

"Given the historic level of U.S. refined product exports, I again urge you to focus in the near term on building inventories in the United States, rather than selling down current stocks and further increasing exports," Granholm said in the letter sent to refiners, a copy of which was seen by Reuters.

High U.S. oil product exports have been a concern for the administration of President Joe Biden this summer as gasoline prices briefly hit a record of $5 a gallon, helping drive inflation to 40-year highs. Gasoline prices have since fallen to about $3.86 per gallon.

Federal weather forecasters have projected an above-average Atlantic hurricane season, which can be a perilous time for refineries. Still-high gasoline prices remain a threat to Biden's fellow Democrats ahead of the Nov. 8 midterm elections, when they hope to retain control of both chambers of Congress.

Granholm said the administration is talking with state officials along the East Coast, where gasoline levels are at their lowest in nearly a decade. It is putting the gasoline and heating oil reserves in the U.S. Northeast, which hold 2 million barrels of fuel, on "active standby" for potential release, and preparing other emergency contingency actions, she said.

The administration hopes that companies will "proactively address this need" of building inventories, she said. If that does not happen, the administration "will need to consider additional federal requirements or other emergency measures," Granholm added, without providing details.

In a wide-ranging meeting with the same refiners in June, Granholm backed off a plan to ban U.S. fuel exports, but the idea has never fully left the table.

Refiners have said a ban could swamp domestic markets with fuel and cause some plants to cut output, which could decrease supply and put upward pressure on prices.

In addition, Northeast refiners import crude and fuels, trade that could be affected by an export ban.

"The export talk is at best a distraction; at worst, counterproductive to price and supply," said a source familiar with Granholm's talks with refiners.

U.S. energy secretary urges refiners not to increase fuel exports
 

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Comments (7)
David Bowie
Defcon2 Aug 29, 2022 12:34AM ET
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This same administration sold oil to China. This country is so screwed up!
Reinhard Gros
Reinhard Gros Aug 29, 2022 12:34AM ET
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Not true. SPR crude is auctioned and traders sold the volumes.
Clay Douglass
Clay Douglass Aug 28, 2022 3:22PM ET
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Chuntholm is useless. wouldn't except the correct spelling.
Clay Douglass
Clay Douglass Aug 28, 2022 3:22PM ET
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Cuntholm is useless.
Andrew Ulferts
Andrew Ulferts Aug 28, 2022 9:27AM ET
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Over a barrel. US oil exporters are having mercy on foreign nations that are already in crisis and can’t pay their bills, because they were brainwashed into a green energy nightmare. Well now it’s here, and the energy crisis we have all seen coming is knocking on our door too. I don’t know why this is so hard for liberals to understand, but we need oil. Oil is good.
Debra Iona Cummings
Debra Iona Cummings Aug 28, 2022 9:27AM ET
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Because everything is all theory with them and never a reality.
Royce Murph
Royce Murph Aug 28, 2022 8:37AM ET
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Granholm is a complete joke. Damaged Michigan fir many years and now our energy resources. Pathetic.
Tony Hall
Tony Hall Aug 27, 2022 4:28PM ET
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This administration taps into our strategic reserve and then sells it to china and now demands the private sector to not sell theirs. Does anyone else see that something’s wrong with this picture in multiple ways.
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Matthew Petyk
Matthew Petyk Aug 27, 2022 4:28PM ET
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Brad will not "enlighten" you, as your contention that there is a problem is accurate. He is a leftist and therfore brainwashed.
Lenny Taylor
Lenny Taylor Aug 27, 2022 4:28PM ET
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Brad only thinks you’re wrong because your “premise” is the exact opposite of that of the inept echo chamber he lives in.
Brad Albright
Brad Albright Aug 27, 2022 4:28PM ET
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The law requires sales from the US SPR yo go to then highest bidder. One sale of 1m barrels went to the US subsidy of a Chinese company.
Tony Hall
Tony Hall Aug 27, 2022 4:28PM ET
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Brad Albright The law does not reqire tapping into our reserve and sell to a communist nation. This was done and now the SPR is at critical levels. So now our government uses communist tactics to enforce the private sector to heel to their command. If your ok with this we know where u stand and we know who you are.
Brad Albright
Brad Albright Aug 27, 2022 4:28PM ET
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Again, another premise detached from the facts.
marcus daily
marcus daily Aug 27, 2022 2:34PM ET
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If this admin was so comcerneded about fuel costs why are they restricting exploration and now passed a corporate tax which will be passed into the citizens. This admin makes no sense.
Andrew Dai
Andrew Dai Aug 27, 2022 2:34PM ET
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Fix your English before sounding nonsense.
Brad Albright
Brad Albright Aug 27, 2022 2:34PM ET
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Familiarize yourself with the just passed Inflation Reduction Act. You clearly don't know what you are talking about.
trevor hron
trevor hron Aug 27, 2022 2:34PM ET
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You’re definitely right on with that. The way they handle these issues shows how little they know about the supply demand issue and companies will be less likely to help with all the added pressure from windfall tax and other administration policies that really hinder the industry over all.
trevor hron
trevor hron Aug 27, 2022 2:34PM ET
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Andrew Dai What was the purpose of that comment? You bring zero value to the discussion. Criticism over proper English is so minuscule compared to what this administration has done, damaging our energy security and facing the highest inflation in four decades. It’s comments and distractions like yours that only make the problem worse. Quick to criticism and slow to act.
Brad Albright
Brad Albright Aug 27, 2022 2:34PM ET
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@trevor. There is no windfall tax. That's false. Get your facts straight. As for your attack on "others administration policies," --- name one.
 
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