Companies selling crude and condensate in Asia have added a new clause in contracts that prevents prices of their oil from falling below $0, eight sources with knowledge of the matter told Reuters on Thursday.
Oil markets were stunned on April 20 when U.S. crude futures collapsed into negative territory for the first time in history, as a coronavirus-induced supply glut and lack of storage saw desperate traders paying to get rid of oil.
The new clause comes as sellers in Asia seek to protect their interests, as prices of some physical crude grades sold in the region have fallen to close to $10 a barrel due to heavy discounts, the sources said.
The sources are involved in a range of crude grades from Asia’s regional low-sulphur crude, to ultra-light condensate, to Russian and Middle East high-sulphur crude.
