Negative price: US oil producers pay extra for consumers to buy it
In one of the segments of the American market, oil prices became negative — manufacturers actually pay consumers to take “black gold”, writes Bloomberg.
In mid-March, a price of minus 19 cents per barrel was fixed for the producer of thick oil Wyoming Asphalt Sour, used mainly for the production of road bitumen. Trading House Mercuria Energy Group Ltd. since mid-March, it has been offering 19 cents for each barrel, which the producers will independently take out of its storage.
“This is crude oil, the extraction sites of which are remote from seaports and which simply have no buyers, — says Elizabeth Murphy, an analyst at ESAI Energy. — In places where the warehouse is quickly filling up, prices can go negative. Otherwise, production stops. ”
Varieties Brent and West Texas Intermediate — standards closely watched on Wall Street. Their price ranges from $ 20 per barrel. But in the world of physical oil, where real barrels of “black gold” change hands, manufacturers get much less because demand is falling due to restrictions on the spread of coronavirus.
Oil traders believe that other sources of oil are likely to see negative prices soon as well, since oil refineries are reducing the amount of oil they process, leaving a fraction extracted far from the sea without access to the pipeline.
Several varieties of crude oil in North America are already trading at a single-digit price as the market tries to force some production to close.
The Canadian Western Select benchmark, the benchmark for the gigantic oil industry in Canada, fell to $ 5,06 a barrel on Friday, March 27.
Gulf of Mexico Southern Green Canyon oil costs $ 11,51 per barrel; Oklahoma Sour goes for 5,75; Nebraska Intermediate — 8, while Wyoming Sweet is priced at $ 3 a barrel.
stdClass Object ([term_id] => 12 [name] => In the US [taxonomy] => category [slug] => novosti-ssha)In the U.S.
stdClass Object ([term_id] => 219 [name] => crisis [taxonomy] => post_tag [slug] => krizis)crisis
stdClass Object ([term_id] => 12338 [name] => Oil prices [taxonomy] => post_tag [slug] => ceny-na-neft)Oil Prices
Read also on ForumDaily:
Let's face the crisis together and support each other
No one in the world expected a coronavirus pandemic, but she came in disrupting the usual rhythm of life and work of billions of people, causing panic and uncertainty about tomorrow.
ForumDaily also faced financial difficulties due to the loss of some advertisers due to the economic downturn and quarantine. But we are not reducing the number of materials and the mode of operation, since we want our readers to receive timely and up-to-date information in this difficult time. In addition, we support Local small businesses in the USA that suffer the most.
But ForumDaily is also a small business. Despite the loss of part of the income, we are doing our best to ensure that you are informed and armed with all the necessary knowledge to counter the pandemic and resolve other important issues during quarantine.
To maintain this rhythm of work, we need your help. We will be grateful for any amount that you are willing to allot to support our team.
Let's face the crisis together!
Security of contributions is guaranteed by the use of the highly secure Stripe system.
Always yours, ForumDaily!
Do you want more important and interesting news about life in the USA and immigration to America? Subscribe to our page in Facebook. Choose the option "Priority in the show" - and read us first. And don't forget to subscribe to ForumDaily Woman and ForumDaily New York - there you will find a lot of interesting and positive information.