(How to) Selling a Discounted Commodity - Clarification
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Short answer, highly unlikely unless the basin it serves is priced over WTI.
Just name the basin, producer and price arb you see. Will get better responses, trust me folks like “oil_quant” know where the bakken or delaware is on a map.
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Interesting found, good work. Truly would need to do more of a deep dive on quality and how they exactly blending. But just this week, this came out. https://rbnenergy.com/make-that-connection-understanding-north-american… . Read before paywall. As it explains WTI over last 10months totally is shifting due to the export driven market, and in fact legit wti is already pricing over WTI. So for sure a possibility.
The premise of what you are describing (buy at a discount, pay freight, sell it somewhere else for a profit) is likely hairier than you think. That 65 dollars of achieved sales is not a fixed number. It will float as the global benchmarks/alternatives to that crude changes. So one quarter it might be 65, one quarter it might be 85. So just because you see that sold at 65 a few months ago and the global benchmark is now around 80, don’t think that you can buy it for a 15 dollar discount to whatever the current brent or wti price is. For Latin American spot crudes, there is usually a tendering and bidding process so that this is competitive and the producer doesn’t receive a terrible price.
Forget about wti. If you want to sell to the East and west coasts, no local refinery will consider the WTI price at Cushing as any sort of comparison as the Cushing hub is totally logistically disconnected to the East and West Coasts. They are not connected to the middle of the country by any pipeline. And even if you load a boat, Jones Act and Panama Canal make your costs prohibitive. Instead, Look at where Alaskan crude trades at on the west coast/ figure out what the econs are for West African or East Coast Canadian crude are on the East Coast. Those are much more relevant than WTI for what you are talking about.
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The refineries you would be supplying would see those as the competitors to your crude, therefore it’s those costs you should care about
Where are you getting these questions from?
Anyone take a screenshot of what OP posted? Looks like the he deleted it
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