L24. Oil Trading Economics: Pricing Mechanisms Cost Structure, Netback and Profitability Analysis + Up to 2 Hours of Live Online Learning

Lecture 24: Oil Trading Economics — Pricing Mechanisms, Cost Structure, Netback and Profitability Analysis

By the end of this lecture, you should be able to:

• Explain the main pricing mechanisms used in crude oil and refined petroleum product transactions.
• Understand the differences between benchmark prices, premiums, discounts and final transaction prices.
• Calculate purchase, transportation, insurance, inspection, storage, financing and other relevant costs.
• Analyze Netback, profit margins and the potential profitability of an oil transaction.
• Determine whether a transaction is economically viable based on its costs, market conditions and associated risks.