Oil trades below zero nationwide as futures market craters
Oil is trading below $0 a barrel across the U.S. after the futures market suffered its worst price crash in history.
Barrels from the country's biggest shale plays are pricing in negative territory, with buyers such as Enterprise Products Partners LP asking to be paid for taking crude in the Permian Basin. Enterprise offered negative prices for all grades, including minus $43.68 a barrel for West Texas Sour.
The meltdown follows the worst day of trading in U.S. history, in which New York oil futures plummeted more than 300% to close at an unprecedented negative $37.63 a barrel. The market was already under pressure as storage across the country fills and the coronavirus pandemic obliterates energy demand.
Bakken crude from North Dakota was worth minus $37.63 a barrel, equivalent to the futures price, according to data compiled by Bloomberg at 3:19 p.m. in New York. That was higher than Alaska North Slope at minus $46.63. Not every grade suffered as badly. On the Gulf Coast, Light Louisiana Sweet was worth $5.73 a barrel, a whopping $41 premium to futures.
Bakken oil producers, landlocked and dependent on pipelines or rail to move their crude to market, are especially vulnerable to the supply glut. With refineries in the U.S. Midwest cutting back production as people stay home and isolate, storage tanks are rapidly filling up.
The biggest U.S. storage hub at Cushing, Oklahoma -- the delivery point of the WTI contract -- has limited room after the volume of oil there jumped 48% to almost 55 million barrels since the end of February.
Prior to Monday's crash, some lesser known crude streams had already sold at negative prices. Late last month, Mercuria Energy Group Ltd. bid negative 47 cents a barrel for Wyoming Asphalt Sour.
