General Economic Imagery From North Dakota Ahead Of The Republican Primary Negative energy prices are rare but not unprecedented. Propane traded at a negative value in Edmonton, a key pipeline hub in oil-rich Alberta province, for about three months last year. Photographer: Daniel Acker/Bloomberg
Flint Hills values North Dakota Sour crude at -$0.50 a barrel Crude prices based on sulfur content and transport costs
Oil is so plentiful and cheap in the U.S. that at least one buyer says it would need to be paid to take a certain type of low-quality crude.
Flint Hills Resources LLC, the refining arm of billionaire brothers Charles and David Koch’s industrial empire, said it would pay -$0.50 a barrel Friday for North Dakota Sour, a high-sulfur grade of crude, according to a list price posted on its website. That’s down from $13.50 a barrel a year ago and $47.60 in January 2014.
While the negative price is due to the lack of pipeline capacity for a particular variety of ultra low quality crude, it underscores how dire things are in the U.S. oil patch. U.S. benchmark oil prices have collapsed more than 70 percent in the past 18 months and West Texas Intermediate for February delivery fell as low as $28.36 a barrel on the New York Mercantile Exchange on Monday, the least in intraday trade since October 2003.
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