Can some one who works on the physical trading desk for a major i.e BP and shell,explain to me how do you go about trading physical crude oil, do you purchase this at a discount from other refinaries and warehouse it and sell it using a forward price. If you are purchasing it from other refinaries do you purchase spot deals or contracts and what discount do you often purchase the product at from platts price.
How do majors do Physical trading of crude, what is your downstream process
SonnyZH
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Depends on the operating architecture of the company. Some work on both the upstream and downstream - integrated oil & gas companies - engaging in the exploration, production, refinement and distribution of oil and gas. Likewise there are companies which centre their operations on the downstream only, which is confined to refinement and marketing activities; they purchase, store and transport it from buyers to suppliers at the correct time.
