Negative Oil Prices? They’re Already Here
With demand evaporating and storage tanks filling up, some producers are paying customers to take their output.
Fill her up.
Photographer: Susana Gonzalez/Bloomberg
Oil markets are in pain. Demand has plummeted, with about three billion people under lockdown just as the world faces a historic supply glut. The world’s crude storage, meanwhile, is filling fast, from underground caverns to rail cars and tankers. For landlocked producers, that hardly matters: Some are already paying customers to take their oil away.
The consequences will be long-lasting. Drillers in the U.S. and elsewhere are scaling back or shutting down production. Against a background of steep spending cuts, not all of that will be swiftly reversible. Price relief will hinge on the world’s convalescence.