Lots of people talk about the price of West Texas Intermediate crude oil at Cushing, OK. But few producers and royalty owners receive that price. In today’s blog we delve into the secret black art of crude oil pricing, focusing on the Bakken. In Part I of our tutorial on crude oil pricing we will cover the mysteries of crude oil “postings” – which is one of the two major mechanisms that determine the prices paid for crude being produced from the oil rich Bakken shale play. (The other mechanism is spot purchases at major trading hubs, and will be the subject of a later installment.) This blog will be the first in a series designed to uncover how crude is priced, what the transportation costs are and how refiners determine the profitability of processing one crude versus another.
Crude Oil Postings
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