In one of the segments of the U.S. market, oil prices turned negative — the manufacturers actually pay consumers to take the “black gold”, according to Bloomberg.
In mid-March price minus 19 cents per barrel was recorded for a manufacturer of thick oil Wyoming Asphalt Sour, used mainly for the production of bitumen. Trading house Mercuria Energy Group Ltd. from mid-March offered 19 cents per barrel, which the producers themselves will take out of his vault.
“This is crude oil, the oil which is removed from ports, and for which there are simply no buyers, says Elizabeth Murphy, analyst at ESAI Energy. — In areas where warehouse quickly fills up, prices can go negative. Otherwise, the extraction stops”.
Brent crude and West Texas Intermediate standard, who is closely watched on wall street, ranging in price above $ 20 per barrel. But in the world of physical oil, where real barrels of “black gold” pass from hand to hand, producers receive much less because demand is falling because of the ban associated with the spread of the coronavirus.
Oil traders believe that other sources of oil, most likely, soon, too, will see negative prices as refineries reduce the amount that they process the oil, leaving part of the oil produced far from the sea, without access to the pipeline.
Several varieties of crude oil in North America is already traded at a price consisting of a single digit, as the market tries to force some production to closing.
Price grade Western Canadian Select, the benchmark for giant oil industry in Canada, fell to 5.06 dollars per barrel on Friday, March 27.
Oil Southern Green Canyon in the Gulf of Mexico is 11.51 dollar per barrel for Oklahoma Sour is 5.75 dollar Nebraska Intermediate — $ 8, while the price of Wyoming Sweet make up 3 dollars per barrel.
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Katrine Johns has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Gal Post, Katrine Johns worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my firstname.lastname@example.org 1-800-268-7128