Because of all of the great sweet oil finds in N. Dakota over the past 10 years, sour crude–a varietal of low quality, high sulfur caliber shit oil, has become the deformed step brother of the oil rich state–now comprising just 7,400 barrels daily out of a total of 1.1 million.
Several years ago, sour crude fetched for $47. As of Friday of this week, Flint Hills resources were willing to pay just $1.50–not including shipping expenses.
Back in 2011, the pipeline companies told sour crude producers to fuck off and to find other methods to ship their disgusting forms of fossil fuels.
Flint Hills Resources LLC, the refining arm of billionaire brothers Charles and David Koch’s industrial empire, said it offered to pay $1.50 a barrel Friday for North Dakota Sour, a high-sulfur grade of crude, according to a corrected list of prices posted on its website Monday. It had previously posted a price of -$0.50. The crude is down from $13.50 a barrel a year ago and $47.60 in January 2014.
While the near-zero 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 fell below $30 a barrel for the first time in 12 years last week. West Texas Intermediate traded as low as $28.36 in New York. Brent, the international benchmark, settled at $28.55 in London.
“Telling producers that they have to pay you to take away their oil certainly gives the producers a whole bunch of incentive to shut in their wells,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said of the price that was posted as negative until Flint Hills revised it on Monday.
Similar agony can be experienced in Canada, amongst a slew of low end oil producers.
Oil is a worthless trash form of energy. Long live the windmill.
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¡¡VIVA DON QUIXOTE!!
Long live the windmill haha!
Error/Correction: This week I said I knew oil would be of consequence since early-mid 14. Wrong I was recalling with a bad chart. The oil move started early Nov 14 not early 14. I said by mid-late December oil would be of consequence, and was suspicious of the move within weeks in November.
zerohedge winkwink
This Oil Thing Is The Real Deal
01/06/2015
That explains a lot.
Lol. What is this? On a side note, my own dribble. Solar has decoupled. Solar names should be trading in the pink sheets with oil here at these levels, if they haven’t. Or maybe the next short?
When I said it looked like oil was going to zero, I thought I was kidding. But then the sour is always worth less. Now that sweet oil has plummeted sour is not only worth less. It’s worthless.
Behold a monstrous bounce in crude underway.