Search This Blog

Sunday, January 27, 2013

NIGERIA - OILBUNKERING - Thesis: Bunkering - Strategy to work around Brent/WTI Spread

Bunkering explained ??? - thesis about working around Brent/WTI Spread
crude oil versus brent 

Longterm Chart WTI vs Brent

since October 2011 Brent has been substantially above WTI. 

96.09 / 113.40 = 0.847354497

The Workaround
To sell Bonny Light which is tagged to Brent Crude at prices roughly 17% above WTI, they simply are bunkering 17 bbls NOT billed on top of each officially loaded 100 bbls to be billed. 

The Arithmetics
100 barrels WTI at USD 96.09 cost USD 9609
USD 9609 cover
84.7354497 barrels Brent (Bonny Light) at USD 113.40

The Result
Thus 15.2645503 barrels of Bonny Light (traded at Brent Crude prices) are to be bunkered secretly on top of 84.7354497 barrels regularily billed and paid.

For the man in the street
On top of each 100 bbl Bonny Light paid for 18 bbl Bonny Light are bunkered

It is clearcut that the oil bunkered does not vanish through theft as suggested in Nigeria. 

Common sense is telling us that reported amounts of oil cannot get lost through spillage and theft from pipelines. 

A logistic task of such dimension can only be run and solved by a highly sophisticated corruptive network.

1) bring transparency into Oil activity in Nigeria

2) Nigeria must leave the OPEC

3) Nigeria starts trading Bonny Light as Bonny Light; stop tagging price to Brent Crude

4) use Future Markets to lock in oil prices. (for budget reasons)

copyright thomas ramseyer