[Marxism] how are (oil) prices set?

David Walters dave.walters at comcast.net
Tue Jul 8 13:00:57 MDT 2008


I might also point out that Venezuela does not get the $144/bbl it's 
going for today (on the spot market) in any event. Their quite sour (hi 
sulfur content) extra-heavy crude goes for a lot less. Still they are 
doing well, obviously, to the tune of about $400 million per day. Most 
prices are for the sweeter, lighter stuff (which Venezuela also has).

I don't know if people are aware to this, but a lot of oil (more before 
the futures market started cutting into the spot market) that is on the 
spot market isn't even sold until it's actually in an oil tanker 
steaming across the ocean. This is especially true of distillates like 
diesel fuel. (the tankers have a broker on board the ship and waits for 
his office to come up with a winning bid, then the ship actually goes to 
that port where the bidder has bought the oil. Strange, but true).

It is a very, very complex system with no central market and, 
increasingly, no central currency for purchases.

David




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