WASHINGTON, DC – Oil prices turned negative yesterday.
That means oil traders were willing to pay others to take a barrel of oil off their hands.
NewsChannel 34’s Anna Wiernicki reports on this historic and devastating blow to the industry that was riding high just a few months ago.
For the first time in history, the price of US oil dropped below zero.
“This has gone from bad to apocalyptic,” says CEO of Canary Oil Dan Eberhart.
Dan Eberhart with Canary Oil says that means oil producers were paying buyers this week to take the oil off their hands.
“Every day that we are producing and not consuming, we are just adding to the stockpile and prolonging an eventual recovery.”
Texas Republican Senator John Cornyn says there’s simply too much oil and nowhere to put it and no one to buy it.
“And until we can find a place for that to go, it is really going to be a tough time for our oil and gas sector,” says Cornyn.
“There is a place to store it. We have a national strategic stockpile that is not full,” says Alabama Democratic Senator Doug Jones.
Jones says there are options like strategic petroleum reserve.
“And so I think the first thing we can do is replenish that and make sure that we have got that full to its capacity,” says Jones.
But Cornyn says that’s only a temporary fix.
“We need to reopen our economy so that the demand will go back up and relieve some of this pressure,” says Cornyn.
“There is storage issues as you know, there is no simple solution to it,” says White House Economic Adviser Larry Kudlow.
White House Economic Adviser Larry Kudlow says he anticipates the economy will begin to bounce back as early as June.
“You get folks going back to work and you start reopening these economies, I would guess oil prices would pick up, but not rapidly.”
Kudlow says the oil industry will continue to feel the pain for awhile while it waits for world demand to come back.