6 Comments
 

Bumping for visibility, looks like you and I are in kind of similar places. Can I PM you? 

 
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Hah all good. I am going to assume you mean like we own a refinery and upstream oil prod. So we own both the input and output. End of the day we either really bullish final output, or really bearish the final input.

Yes while using futures alone is good (for instance very common for LNG portfolios to do this). Still think more clarity on; margin advantages, physical arb, ability to create real options would make your pitch superior.

I will give an example; same refinary/upstream if we goto engineering team they would say build the refinery next door cause logistically easier. While the trading/commercial team would say no build it possibly way further cause the downstream optionality is way bigger. Maybe we can serve 2-3 customers downstream, maybe we can schedule shipments over 3 weeks vs 1. So on.

 

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