The fall in demand for oil in the US market forces some producers to pay for unloading their warehouses, reports the Bloomberg agency.
The Wyoming Asphalt Sour company was the first to put a negative price to oil, depending on the medium. Its raw materials are mainly used for the production of bitumen.
Mercuria Energy Group Ltd. was willing to pay 19 cents for each barrel of crude oil removed from its storage facilities in mid-March. The company sells high sulfur oil.
According to ESAI Energy analyst Elisabeth Murphy, the places where this oil is produced are far from seaports and it is difficult to transport it to consumers.
Oil traders, surveyed by the agency, do not rule out that other types of low-quality crude may soon face a negative price.
Lack of storage facilities also forced refineries in Europe and the US to refuse Saudi oil despite low prices offered by the kingdom. At the same time, Riyadh’s clients do not see sales prospects due to the global recession, the newspaper reported. The Wall Street Journal March 26.
Demand for crude oil and petroleum products is declining due to the economic crisis associated with the coronavirus pandemic. In this context, some sellers are forced to lower prices.
Another reason that caused the collapse of oil prices is the failure of the OPEC + agreement and the promise of Saudi Arabia to increase production. In total, prices have more than halved since the beginning of the year.