balois

How Do You Buy Spot Oil?

Julian Murdoch writes

“...The spot price is relatively unimportant in global oil markets...”

Not quite. The cash / spot prices are the all important underlying and reference source for futures, options, swaps and contract pricing. McGraw-Hill Platt s price assessment are the most important “spot price makers”, hence they virtually “rule” the world s oil pricing.

And sometimes hick-ups do happen:

“...WTI prices in Cushing, Oklahoma have disconnected for extensive periods from markets elsewhere in the US and the world. This results in erroneous signals and mispricing for refiners, exporters of crude to the US and the trading community. The distortions were extremely severe in 2008 and 2009...

Mark-to-market problematic everywhere. Some more oil pricing methodology insight here
www.platts.com/Oil/Res...

have a good day