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Oil prices dip below zero as producers forced to pay to dispose of excess
US oil prices turned negative for the first time on record on Monday as North America’s oil producers run out of space to store an unprecedented oversupply of crude left by the coronavirus crisis.
The price of US crude oil collapsed by more than 105% to -$2 per barrel in a matter of hours, forcing oil producers to pay buyers to take the glut of crude which they cannot store, as rising stockpiles of crude threaten to overwhelm oil storage facilities.
The crash in demand caused by the Covid-19 pandemic also forced Canada’s benchmark oil price to plunge into negative territory for the first time on Monday.
“The problem of the global supply-demand imbalance has started to really manifest itself in prices,” Bjornar Tonhaugen, head of oil at Rystad Energy said. “As production continues relatively unscathed, storages are filling up by the day. The world is using less and less oil and producers now feel how this translates.”
US oil prices turned negative for the first time on record on Monday as North America’s oil producers run out of space to store an unprecedented oversupply of crude left by the coronavirus crisis.
The price of US crude oil collapsed by more than 105% to -$2 per barrel in a matter of hours, forcing oil producers to pay buyers to take the glut of crude which they cannot store, as rising stockpiles of crude threaten to overwhelm oil storage facilities.
The crash in demand caused by the Covid-19 pandemic also forced Canada’s benchmark oil price to plunge into negative territory for the first time on Monday.
“The problem of the global supply-demand imbalance has started to really manifest itself in prices,” Bjornar Tonhaugen, head of oil at Rystad Energy said. “As production continues relatively unscathed, storages are filling up by the day. The world is using less and less oil and producers now feel how this translates.”
15.88 lower than the cost to produce oil- About time these thief's
get their just deserts served cold!
