Citgo withdraws request, Marathon seeks to draw oil from SPR

| 9/4/2008

Although Citgo Petroleum Corp. announced late Wednesday, Sept. 3, that it no longer needed to draw oil from the Strategic Petroleum Reserve, the U.S. Department of Energy announced that another company, Marathon Oil Corp., has requested to draw on the reserve.

On Tuesday, Sept. 2, Citgo requested to draw 250,000 barrels of oil from the SPR, but the DOE said the oil company changed its mind and withdrew its request, stating that it had found adequate oil supplies to meet its refinery needs.

Citgo’s Lake Charles, LA, refinery was closed when Hurricane Gustav hit the region and the Casasieu ship channel was closed to its tanker ships, blocking 100 percent of the oil output in the U.S. Gulf of Mexico.

However, the channel has largely reopened, allowing larger ships back in.

Although the DOE isn’t stating how much reserve oil Marathon is seeking, the company has asked to draw from the SPR to meet the oil supply needs of two of its refineries in Robinson, IL, and Catlettsburg, KY, blaming a supply disruption in the aftermath of Hurricane Gustav. Those two refineries have a combined refining capacity of approximately 414,000 barrels of oil per day.

Currently, more than 700 million barrels of oil are being stored in the underground caverns along the Texas and Louisiana Gulf Coast.

Crude prices have fallen nearly 8 percent in a week, according to MarketWatch.