Its not like that pal, this is a very very very complex business. You can trade freight forwards contracts and hedge yourself against supertanker storage etc etc etc.. Or You can used foreing storage in the carribbean and use the currency rates to even double your profits. F. Swaps, FFA's etc, this is a another level pal.
Two thirds of the world's internationally traded crude oil supplies are priced relative to The BRENT benchmark. The Brent benchmark oil is a combination of crude oil from 15 different oil fields in the Brent and Nigerian areas and the North Sea. And Guess what? The Brent is trading $14 dollar over the WTI benchmark...
The Only reason the WTI is the future market global benchmark is because its superior quality.. That's it.
through either formal exchanges or OTC markets, Physical market participants could secure or hedge contract quantities and therefore mitigate future price risk exposure for the underlying physical requirements.
The problem here on ET, is that 90% of the people don't have any idea how this and others commodities markets works over the Physical-OTC, which is by far the biggest market in the world, Over 517 Trillion dollar exchange hands every year in the physical-OTC commodities markets. Its very hard to manipulate.
That's why russia, venezuela, Brazil, Saudis and others trillion dollar producers can't stop oil prices disaster.
Did You know that on Dec 08, Americans drove 9.6 billion miles less vs Dec 07???.. You need oil for everything, even to build a car, lipsticks, windows, everything. And every single country in the world is un deep trouble right now.
Its another level pal.
