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.”
