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Thursday, 3 August 2017

Oil’s Going, Going, Gone: Crude’s Worth Revealed at Auctions - Bloomberg

Oil’s Going, Going, Gone: Crude’s Worth Revealed at Auctions - Bloomberg:

"Oil producers who for years tracked top OPEC member Saudi Arabia to help set the price of their crude could now be looking to go solo. With $100 oil a distant memory and U.S. crude eating into their share of prized markets, they are seeking new ways to assess if their supply may be worth more -- a prospect that’ll help prop up their battered economies. Iraq’s state oil marketing company and Malaysia’s government-run producer are auctioning off cargoes on the Dubai Mercantile Exchange this year for the first time as sellers look to gauge demand by analyzing bids and buyer interest. By sending crude under the hammer, sellers are hoping potential buyers will outbid each other and boost the value of their oil. In more common methods such as tenders or private negotiations, prospective customers can’t top an opposing offer even if they are willing to because they may not be aware of it. Information gleaned from auctions is seen helping producers set monthly official prices for shipments under long-term contracts, which is how most of their crude is supplied."

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