--- description: Oil has become so depressed that producers are paying buyers to take oil off of their hands. title: Oil Prices Are Going Negative image: https://static.time.com/v3/assets/bltea6093859af6183b/blt9ddeba2151c16be5/698778922dce018e5a9dccdf/money-dollar-bill.jpg?branch=production&width=3840&quality=75&auto=webp&crop=16:9 ---  * [World](/section/world/) ## World Update your preferences in [Account Settings](/account/preferences/) Close * [energy](/tag/energy/) ## energy Update your preferences in [Account Settings](/account/preferences/) Close # Oil Prices Are Going Negative by [Charles Kennedy / Oilprice.com](/author/oilprice-com/) ## Charles Kennedy / Oilprice.com Update your preferences in [Account Settings](/account/preferences/) Close Jan 19, 2016 4:38 PM CUT  Elizabeth Renstrom for TIME by [Charles Kennedy / Oilprice.com](/author/oilprice-com/) ## Charles Kennedy / Oilprice.com Update your preferences in [Account Settings](/account/preferences/) Close Jan 19, 2016 4:38 PM CUT The oil markets are on edge with oil sinking into the $20s per barrel. And last week we [reported](http://oilprice.com/Energy/Oil-Prices/Forget-20-Oil-Prices-At-8-Per-Barrel-In-Canada.html "undefined") on one place where oil is already trading in the single-digits. Canada’s bitumen is selling for just $8 per barrel. But even that rock bottom price is higher than what one oil seller earned for a shipment recently. In a bizarre turn of events, Bloomberg [reported](http://www.bloomberg.com/news/articles/2016-01-18/the-north-dakota-crude-oil-that-s-worth-less-than-nothing "undefined") that Flint Hill Resources, a refining unit owned by the Koch brothers, said that they would [purchase](https://www.fhr.com/refining/bulletins.aspx?AspxAutoDetectCookieSupport=1 "undefined") sour crude from North Dakota for $-0.50 per barrel. That’s right: a negative price. Oil has become so depressed that producers are paying buyers to take oil off of their hands. **_Oilprice.com:_** [_Oil Prices Fall Again As Traders Remain Fearful Of Iranian Production_](http://oilprice.com/Energy/Energy-General/Oil-Prices-Fall-Again-As-Traders-Remain-Fearful-Of-Iranian-Production.html "undefined") How can the oil price go negative? This specific type of crude is suffering from a perfect storm of bad news. Obviously, most of the blame has to do with WTI dropping to its lowest level in more than a decade. But the type of crude that Flint Hills is purchasing is sour, which means it has a high-sulfur content. That requires a different type of refining and thus fetches a lower prices. And more importantly, North Dakota Sour has a shortage of pipeline capacity, which further pushes down prices. Enbridge, for example, does not allow North Dakota Sour on its pipeline system. As a result, North Dakota producers of the high-sulfur blend have had to find other ways to export their product out of state since 2011, often relying on expensive routes such as rail or trucks. That makes their oil even less competitive. **_Oilprice.com:_** [_U.S. Crude Production Could Fall Harder Than Thought In 2016_](http://oilprice.com/Energy/Crude-Oil/US-Crude-Production-Could-Fall-Harder-Than-Thought-In-2016.html "undefined") To be sure, North Dakota sour only makes up a small share of the state’s oil output – only around 15,000 barrels per day. Most of the shale oil in the Bakken is sweet, or low in sulfur. But for sour producers that have always sold their oil at a discount, the collapse of WTI has pushed their prices into negative territory. They are now having to pay buyers to take their oil. “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 Houston-based Lipow Oil Associates LLC, told Bloomberg. _This_ [_article_](http://oilprice.com/Energy/Oil-Prices/Oil-Sold-for-050-per-Barrel-A-Negative-Price.html "undefined") _originally appeared on_ [_Oilprice.com_](http://oilprice.com "undefined") ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/4185213/oil-prices-negative/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/4185213/oil-prices-negative/"},"headline":"Oil Prices Are Going Negative","datePublished":"2016-01-19T16:38:26.000Z","dateModified":"2026-02-22T14:14:48.018Z","description":"Oil has become so depressed that producers are paying buyers to take oil off of their hands","url":"https://time.com/4185213/oil-prices-negative/","keywords":["energy","Canada","Crude Oil","Oil prices"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/blt9ddeba2151c16be5/698778922dce018e5a9dccdf/money-dollar-bill.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Charles Kennedy / Oilprice.com"}],"articleSection":"World","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/blt9ddeba2151c16be5/698778922dce018e5a9dccdf/money-dollar-bill.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"TIME.com stock photos Money Dollar Bills","caption":"TIME.com stock photos Money Dollar Bills","creditText":"Elizabeth Renstrom for TIME","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/world/","name":"World"}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/energy/","name":"energy"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/4185213/oil-prices-negative/","name":"Oil Prices Are Going Negative"}}]},{"@context":"https://schema.org","@type":"VideoObject","name":"John Oliver Slam North Dakota’s Oil Industry on 'Last Week Tonight'","description":"Oliver and the gang picked the booming oil industry of North Dakota as this week’s topic, pointing out some disturbing stats and a lack of accountability among oil companies in the state.","thumbnailUrl":"https://cdn.jwplayer.com/v2/media/FD455SDo/poster.jpg?width=720","uploadDate":"2015-10-12T20:42:07.000Z","contentUrl":"https://cdn.jwplayer.com/manifests/FD455SDo.m3u8","embedUrl":"https://time.com/4185213/oil-prices-negative/","duration":"PT1M8S","potentialAction":{"@type":"SeekToAction","target":"https://time.com/4185213/oil-prices-negative/?jw_start={seek_to_second_number}","startOffset-input":"required name=seek_to_second_number"}}] ```