A pint of good beer up in Canada will probably cost you about $5 bucks. You can now get a barrel of oil for less than that.

Traders tell me that the price of Western Canada Select (WCS) is being quoted at $4.18 per barrel as of this writing. A "wouldn't have believed it if I hadn't seen the trade screen myself" kind of situation. But there it was.

Source: Bloomberg

To be fair, WCS ain't WTI. Western Canada Select is actually not very select. It's a heavier blend, more acidic. If the good Texas stuff is like water, WCS is like maple syrup. Because of this it always trades at a fairly deep discount to the premium West Texas blend, usually anywhere from $8 to $15 bucks per barrel.

But $4 dollar oil is incredible nonetheless.

Traders tell me one reason it's so cheap is that the China market is basically closed, so you can't ship it to Asia. Sending it to the Gulf of Mexico by rail and pipeline adds about $8-10 dollars to the price, and no one down there really wants it anyway because there's so much oil everywhere and the tanks are filling up.

Currently, there are a few out-of-the-way places in smaller oil markets where stories of negatively priced crude are happening now. As Goldman Sachs wrote today, "the demand shock is extremely negative for oil prices and is sending landlocked crude prices into negative territory."

In other words, producers pay someone to take the crude, rather than get paid for it. Why would they do that? Because it's expensive to shut down or reopen a well, and may actually be cheaper to simply pay someone to remove it, especially if you believe prices may turn higher in a few months.