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106 comments on TWIP - This Week In Petroleum (1-3-08)

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tommy on January 3, 2008 - 3:04pm Permalink | Subthread | Comments top

Wouldn't refineries have bought up contracts for quite a number of months in the future at a much lower price than $100?

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2Lab on January 3, 2008 - 3:14pm Permalink | Subthread | Parent | Comments top

Just because something is bought cheap don't mean it's worth less.

If refined product is being sold at 85$bbl equivalent, they could make more money selling the crude at £100.
So although the company may be making a profit if they bought the crude futures, or arranged contracts for less than 85$, the actual refining would be losing 15$ of profit.

Maybe the oil companies want to keep profits low to avoid the usual calls for them to be taxed into the ground.

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cyclelicious on January 3, 2008 - 4:17pm Permalink | Subthread | Parent | Comments top

Also, doesn't Saudi Arabia sell at a discount to U.S. refineries?

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Robert Marston on January 6, 2008 - 9:12pm Permalink | Subthread | Parent | Comments top

I also read recently that Iraq was selling to the US at a pretty substantial discount of around $80 per barrel.

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106 comments on TWIP - This Week In Petroleum (1-3-08)

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