Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Copper Tip Energy Services
Vista Projects
Vista Projects
Copper Tip Energy


One Corner of U.S. Oil Market Has Already Seen Negative Prices


These translations are done via Google Translate

By Javier Blas and Sheela Tobben

(Bloomberg)In an obscure corner of the American physical oil market, crude prices have turned negative — producers are actually paying consumers to take away the black stuff.

The first crude stream to turn upside down was Wyoming Asphalt Sour, a dense oil used mostly to produce paving bitumen. Mercuria Energy Group Ltd., a trading house, bid negative 19 cents per barrel in mid-March for the crude, effectively asking producers to pay for the luxury of getting rid of their output.

“These are landlocked crude with just no buyers,” said Elisabeth Murphy, an analyst at consultant ESAI Energy. “In areas where storage is filling up quickly, prices could go negative. Shut-ins are likely to happen by then.”

ROO.AI Oil and Gas Field Service Software
GLJ

Brent and West Texas Intermediate, the benchmarks closely followed in Wall Street, are hovering above $20 a barrel. But in the world of physical oil — where actual barrels change hands — producers are getting much less as demand plunges due to the lockdown to contain the spread of the coronavirus.

Oil traders believe other crude streams are likely to see negative prices soon at the well-head as refiners reduce the amount of crude they process, leaving some landlocked crude without easy access to pipeline trapped.

Several crude grades in North American are already trading inside the single digit territory as the market tries to force some output to shut-in. Canadian Western Select, the benchmark price for the giant oil-sands industry in Canada, fell to $5.06 a barrel on Friday. Southern Green Canyon in the Gulf of Mexico is worth $11.51 a barrel, Oklahoma Sour is changing hands at $5.75, Nebraska Intermediate at $8, while Wyoming Sweet prices at $3 a barrel.



Share This:



More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE