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Can we park the outbreak of f*ckwittery ?
Oil price - the delta in realised prices and spot prices is due to the time offset. Hedged production sales and the fact the quoted spot price is for futures rather than the real time price. Its entirely possible in a declining oil price market for a producer to realise more per barrel than Brent mean price, likewise in a rising / recovering market hedged contract prices may lag the current quote for futures. Then you throw in stocks and backlogs, timed offtakes, transport offsets and it gets even more complicated.
Bottom line is in a completely flat market Amerisur's production would sell for Brent price less transport costs. If they were producing WTI spec they would sell for that less transport costs.
pickedpeck
I am not sure what the problem is - the reason that I referred to WTI when noting the recent slight improvement in the oil price was because AMER’s realised prices are generally closer to WTI than Brent.
AMER's oil tends to be light crude which demands a premium price & BoD refer to Brent pricing.
Rosannan, no they are not.
They may be coincidentally for one year where there was a recovering oil price, in a falling market they may actually be higher than the Brent mean. You're also missing the point that the realised price is usually discounted at the well head for transport costs to a terminal, whilst if AMER sell at the terminal they take the transport / pipeline costs as a separate line item. CPO5 production is sold at the well head for Brent price less a few dollars for truck transport. So the realised price varies according to field infrastructure as well as spec.
WTI vs Brent often move separately, the spread between the two has been i.r.o. $2 - $10 over the last few years depending global supply and demand for each. Amerisur's production is linked to Brent as it is the closest in spec to their product, but they may even start at a premium price to Brent as the light oil they produce is desirable for blending with the heavy oil from the rest of Llanos (e.g. Rubiales).
Besides, the F*ckwittery comment wasn't aimed at you in particular, but as you've put your hand up and assumed it was...
pickedpeck
It was perfectly reasonable to highlight the slight move upwards by the oil price by referring to WTI just as it would have been perfectly reasonable to highlight it by referring to Brent. As I said, average Brent in 2018 was $71 per barrel. In 2018 AMER’s average realised oil price was $64.80 per barrel and the 2018 average for WTI was $64.90. I just thought that Juxtapose’s response was a little patronising, but with hindsight I should have let it pass.