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Negative Oil Prices Arrive: Koch Brothers' Refinery "Pays" -$0.50 For North Dakota Crude
ZeroHedge ^ | 01/18/2016 | Tyler Durden

Posted on 01/18/2016 10:55:19 AM PST by Freelance Warrior

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1 posted on 01/18/2016 10:55:19 AM PST by Freelance Warrior
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To: Freelance Warrior

and so it begins.....


2 posted on 01/18/2016 11:00:31 AM PST by beebuster2000
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To: Freelance Warrior

If supply exceeds demand, and supply is basically a waste product of creating other supply to meet demand, you very well may have to pay people to take it away. Kinda like “recycling”: I’ve got stuff that _could_ be used, but just dumping it costs me more than paying you to take it away for reuse.


3 posted on 01/18/2016 11:03:51 AM PST by ctdonath2 (History does not long entrust the care of freedom to the week or the timid. - Ike)
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To: Freelance Warrior

We are watching the creation of a new “remember when” situation in America and the world.

I’m not sure where. I’m not sure what will happen. I’m not sure when.

But I am darned sure, there will be a (massive) rise in oil at some point.

Just saying.


4 posted on 01/18/2016 11:04:03 AM PST by Cringing Negativism Network
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To: Freelance Warrior

No big deal, if they can buy a cheap low-value feedstock and make it into something of higher value, what’s wrong with that? Years ago, restaurants etc had to pay someone to come and pickup their “yellow grease” aka used cooking oil. Now, biodiesel refiners pay for it and there is a whole new market with strong demand for a very limited supply. That’s economics.


5 posted on 01/18/2016 11:04:13 AM PST by bigbob ("Victorious warriors win first ande then go to war" Sun Tzu.)
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To: Freelance Warrior

Pine Bend has always consumed heavy sour crude from Canada that was priced much less than WTI.
I am surprised at this discount, however.


6 posted on 01/18/2016 11:04:19 AM PST by Eric in the Ozarks (Baseball players, gangsters and musicians are remembered. But journalists are forgotten.)
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To: ctdonath2

It is not a waste product. This is oil from the wells.

by the way, this looks to be fake. The link below is to the real bulletin prices. Click on Jan 15 and the price shows as $1.5, not -$0.5.

https://www.fhr.com/refining/bulletins.aspx


7 posted on 01/18/2016 11:08:52 AM PST by thackney (life is fragile, handle with prayer)
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To: Freelance Warrior

Fake, click on Jan 15 for the price bulletin that day.

https://www.fhr.com/refining/bulletins.aspx


8 posted on 01/18/2016 11:09:26 AM PST by thackney (life is fragile, handle with prayer)
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To: Freelance Warrior

I believe that type of crude is what is directly under us at the Spearfish formation. I also believe much of it goes to Canada for refining. Across the border the Canadians have many more wells pumping the same thing and lots of it is trucked up there for refining according to a Manitoba truck tanker truck driver.

Nonetheless, the boom is over.


9 posted on 01/18/2016 11:09:53 AM PST by redfreedom (Voting for the lesser of two evils is still voting for evil.)
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To: bigbob

If oil gets to $10 or less per barrel, there will be no use for biofuel, solar,wind or nuclear energy. It will be too expensive to keep them afloat even with taxpayer subsidies.


10 posted on 01/18/2016 11:15:04 AM PST by txrefugee
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To: thackney
Fake, click on Jan 15 for the price bulletin that day.

Bloomberg reports the same:

Copy and paste into your browser's address box:

http://www.bloomberg.com/news/articles/2016-01-18/the-north-dakota-crude-oil-that-s-worth-less-than-nothing

11 posted on 01/18/2016 11:15:40 AM PST by Freelance Warrior (A Russian.)
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To: txrefugee
solar,wind or nuclear energy

Oil is not uses to make electricity, so these things are not related. What is related is the price of coal an ng both are in competition with "renewables".

12 posted on 01/18/2016 11:21:04 AM PST by central_va (I won't be reconstructed and I do not give a damn.)
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To: Freelance Warrior

And yet, the bulletin they claim in their article, doesn’t exist where they claim the information is from.

In their article, they link to the same web site I posted. Click their words “said it would pay” and it takes you to the website “https://www.fhr.com/refining/bulletins.aspx";.

The price in the article doesn’t exist at the source they claim.

Someone got tricked and others are repeating it without bothering to check the facts.


13 posted on 01/18/2016 11:25:18 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney
The price in the article doesn’t exist at the source they claim.

Well, I agree on this, but Bloomberg still reports the same. Probably that was a technical mistake which they've corrected later.

14 posted on 01/18/2016 11:34:21 AM PST by Freelance Warrior (A Russian.)
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To: Freelance Warrior

And we will see blogs carrying the story for a couple weeks...


15 posted on 01/18/2016 11:34:59 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

If it’s poor-quality “sour” crude oil in small quantities from an inconvenient location, not unlikely that nobody particularly wants it unless paid a modest sum to take it.

Looking at your link, I’m inclined to think the price was fluctuating thru the day.

A single train tanker car carries about 700 barrels. The refinery in question produces about 21 carloads of this stuff, selling for $0.50/barrel on 1/12 ... that’s $7500 gross revenue on one day’s production, or about $350 per carload. At that price, it’s a real short step from barely covering cost of selling the largely unwanted cargo, to paying someone the price of taking away what otherwise would be free (but for the relentless cost of removing that which can’t be viably stored).

Between this and the “no ships are moving” article, methinks Tyler Durden is doing everything he can to be first to call “the avalanche is starting!” - he’s sorta onto something, but reality isn’t what he’s trying to portray it as.


16 posted on 01/18/2016 11:35:45 AM PST by ctdonath2 (History does not long entrust the care of freedom to the week or the timid. - Ike)
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To: ctdonath2
Looking at your link, I'm inclined to think the price was fluctuating thru the day.

They post a daily price, not an hourly. It could have been a mistake as others suggested, or a fake. But I look at this site often. They don't vary it through the day.

17 posted on 01/18/2016 11:37:41 AM PST by thackney (life is fragile, handle with prayer)
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To: ctdonath2
The refinery in question produces about 21 carloads of this stuff

This isn't produced at a refinery. It comes from wells. The refineries buy it to refine into fuels.

18 posted on 01/18/2016 11:38:39 AM PST by thackney (life is fragile, handle with prayer)
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To: ctdonath2
"no ships are moving" article

Also a fake claim from Zero Hedge. There were ships arriving in ports each day following that article. I posted links to the arrival dates for 3 US ports.

19 posted on 01/18/2016 11:40:23 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

If it was a mistake, understandable that they fixed it.
If it was real, understandable they adjusted it when able to find a buyer.
I doubt it was “fake”. That’s pretty obscure to plant a fake with that little consequence.

Yes, it comes from wells. _What_ comes from that site is posted as 6 different kinds of oil. What we peanut gallery types colloquially call “oil” is really a range of black liquid, some kinds more desirable/useful than others. Some well(s) is pumping out some pretty nasty stuff, apparently almost unusable to the point that some days perhaps nobody wants it (at risk of having to pay someone to take it away).

As for the “no ships moving”, seems “Tyler” didn’t notice he was looking at a “docked ships only” data set. We both saw the thread on that, which died pretty quick. Like I said, he’s frantically looking for a “doomsday has arrived!” scenario.


20 posted on 01/18/2016 11:47:25 AM PST by ctdonath2 (History does not long entrust the care of freedom to the week or the timid. - Ike)
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