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Kuwait adjusts the pricing standard for its crude oil destined for Asia


yota691
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Iraq, May 3, 2017 

Iraq’s state-oil marketer SOMO and Russia’s Litasco have set up a joint trading company in Dubai to market crude, trading sources said, joining other Middle East producers that buy and sell oil to boost their incomes.

The new venture, LIMA Energy, is establishing a team to work at the Dubai Multi Commodities Centre (DMCC), the sources said, adding that it would trade in Iraqi, Russian and other crude.

“LIMA will lift the first cargo of Iraqi crude in May,” one source said.

 

LIMA is modelled after Oman Trading International which began as a venture between Oman Oil and Vitol, the sources said. OTI is now fully owned by Oman Oil and trades Omani crude, products and LNG.

Up to 10 SOMO members of staff, including its head of shipping, could be seconded to LIMA, one of the sources said.

Litasco, a unit of Russia’s Lukoil which develops oil fields in southern Iraq, is one of the world’s biggest traders. Iraq is the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia.

The Iraqi oil ministry said last month it has agreed with Litasco to form an oil marketing venture, but did not give details at the time.

Last week, SOMO sold its first cargo of Basra Light crude via an auction on the Dubai Mercantile Exchange (DME), which could become a platform for price discovery. DME is now the marketplace for most Omani crude sold in Asia.

Other oil producers have set up commodities trading firms. Saudi Aramco, the world’s biggest oil producing company, set up Aramco Trading in 2012 to market refined products, base oils and bulk petrochemicals.

SOMO handles exports from areas under control of Iraq’s central government, but not exports from the northern region that is under Kurdish control. SOMO’s average crude exports were 3.756 million barrels per day in March.

ekurd

http://iraqdailyjournal.com/story-z15222582

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  • 3 weeks later...

"SOMO" raises of 2 million barrels of crude Basra Stock Exchange Dubai Energy

"SOMO" raises of 2 million barrels of crude Basra Stock Exchange Dubai Energy
The shipment will be launched on May 31 - Reuters Photo Arabian Eye
 
 May 23, 2017 13:54

Dubai - directly said the DME, the first international exchange in the Middle East region for decades, energy futures and commodities, on Tuesday, said that the Iraqi oil marketing company "SOMO", plans to sell a second shipment of Basra Light crude through the auction platform.

The statement received "direct" version, it will subtract 2 million barrels delivered in July 2017 on 31 May.

According to the statement, it will be determined by the minimum price; according to the official selling price for the month of July 2017 and will be announced during the first 10 days of June, to be added one cent to at least the price of the barrel.

It pointed out that it will open the door to participate in the auction for companies that owns one refinery, at least in Asia.

The statement stressed the growing demand from Asian markets on the production of Basra light crude; where he participated in the first auction, which was held last April 28, about 20, trading more than 40 bidding within two minutes; the sale of 2 million barrels of Iraqi oil.

The auction referred to in which the SOMO sold of 2 million barrels of Basra Light crude, for delivery in June 2017 , the highest price of the shipment amounted to 31 cents, added to the official selling price (OSP) for Basrah Light crude loading June. 

Auctions Dubai offers a platform; the parties involved in the market the flexibility to buy and sell goods through the electronic system are subject to specific controls in terms of pricing and levels of security and convenience. "

The company SOMO, indicated 11 last April, that Iraq kept the official price for the sale of Basra Light crude for Asia; shipments in May at least US $ 0.75 , the average prices of Khami Oman and Dubai in the previous month.

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On May 2, 2017 at 7:29 AM, The Englishman said:

Found this tweet a short while ago.

 

Following #Iraqi Somo's success in selling its first cargo via the DME, the #KRG are now in talks with the DME.

So whats good for Iraqi somo, it's good for the KRG,

Very interesting if the KRG pull it off, i await for this news to break in respected articles.

Good find Englishman.  :twothumbs:

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  • yota691 changed the title to Iraq is heading to hedge in oil production

First Published: 2017-05-29

 

Iraq is heading to hedge in oil production

 

Iraq's ambassador to OPEC says that his country is considering the option of the hedge to protect government revenues in the face of the risk of crude price volatility.

 

Middle East Online

 
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New ways to face the doors of confusion oil prices

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Larnaca (Cyprus) - Falah Al Amiri, head of the Iraqi Oil Marketing Company (SOMO) said that his country might consider hedging part of its crude oil production as a means of protecting government revenues in the face of the risk of crude price volatility.

Said Amiri, who is also Iraq's ambassador to the Organization of the Petroleum Exporting Countries (OPEC), "from within our strategy in the future we may examine hedge for a portion of Iraqi crude, SOMO suggests the idea at the present time has not been studied yet."

It is not clear who has the type of hedge studied by SOMO. Seeking some institutions, such as Pemex oil monopoly in Mexico, to ensure the sale of oil at a fixed price and content throughout the year, while others such as Shell and BP in sales against the volatility of oil prices in the short-term hedge.

It helps hedge in the short term to reduce price fluctuations between the time of signing the sale of oil contracts for delivery time and payment of value.

Amri said, "There are a lot of requirements that must be implemented first, a need to hedge the study of well-trained people and the need to know the best companies operating in the hedge, we still do not understand the hedging process completely." He added that it is not certain that Iraq will adopt hedging practices.

Amiri also said that SOMO aims to use tools such as auctions and joint ventures to promote the interests of Iraq's oil and reduce the import of petroleum products.

And it established Somo and Atasko Russian joint venture for trade in Dubai crude to market from joining it to other producers in the Middle East are buying and selling oil to boost their income.

Last month, SOMO sold the first shipment of Basra light crude through bidding in the DME, which may become a platform for price discovery. Being the Omani crude market, which is sold in Asia at the Dubai Mercantile Exchange today.

It agreed the largest oil producers in OPEC Saudi Arabia and Iraq Monday on the need to extend a global reduction of oil production for nine additional months in a bid to support crude prices, which removed a stumbling block was possible before the organization announced Thursday the decision to extend oil production cuts nine months to March 2018.

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  • yota691 changed the title to SOMO: Iraq may consider hedging in oil production
History of edits:: 2017/5/29 14:40 • 73 times readable
SOMO: Iraq may consider hedging in oil production
{Baghdad: Euphrates News} head of the Iraqi oil marketing company SOMO} {Falah al-Amiri said that Iraq might consider hedging part of its crude oil production as a means of protecting government revenues in the face of the risk of crude price volatility.
Al - Ameri added, Iraq 's ambassador to the Organization of the Petroleum Exporting Countries {OPEC} in a press statement "from within our strategy in the future we may examine hedge for a portion of Iraqi crude, and Somo suggests the idea at the present time has not been studied yet." 
He continued , "It is not clear hedge that has studied by Somo type, and seeking some institutions, such as Pemex oil monopoly in Mexico, to ensure that the sale of oil at a fixed price and content throughout the year , while others such as Shell and BP in sales against the volatility of oil prices in the short - term hedge" . 
And "it helps hedge in the short term to reduce price fluctuations between the time of signing the sale of oil contracts for delivery time and payment of value." 
Amri said , "There are a lot of requirements that must be implemented first , a need to hedge the study of well - trained people and the need to know the best companies working in the hedge .. We still do not understand the hedging process completely." 
He noted that " it is not certain that Iraq will adopt hedging practices." 
Amiri also said that "SOMO aims to use tools such as auctions and joint ventures to promote the interests of Iraq 's oil and reduce the import of petroleum products." 
And founded Sumo {and} Atasko Russian joint venture for trade in Dubai crude to market from joining it to other producers in the Middle East are buying and selling oil to boost their income. 
Last month , SOMO sold the first shipment of Basra light crude through bidding in the DME, which may become a platform for price discovery. 
Being the Omani crude market , which is sold in Asia at the Dubai Mercantile Exchange Halaa.anthy
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Some folks with greater knowledge of hedging crude oil may know more here. In my opinion, hedging would need Iraq to be released from all, or nearly all, international sanctions and could indicate the IQD is international if hedging is conducted. Hedging crude oil would seem to imply Iraq has it's Big Boy Pants on and is a bone fide World Trade Organization partner.

 

Any thoughts?

 

Go Moola Nova!

:twothumbs:

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Just now, Synopsis said:

Some folks with greater knowledge of hedging crude oil may know more here. In my opinion, hedging would need Iraq to be released from all, or nearly all, international sanctions and could indicate the IQD is international if hedging is conducted. Hedging crude oil would seem to imply Iraq has it's Big Boy Pants on and is a bone fide World Trade Organization partner.

 

Any thoughts?

 

Go Moola Nova!

:twothumbs:

 

Agreed. :cigar::cigar:

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quick search on hedging.. 

Quote

Hedging involves locking in a price to buy or sell a commodity in the future. It is a form of insurance against adverse moves in markets notorious for them. Hedging is also employed in currencies, interest rates and stock indices, but it originated in grain markets.Mar 3, 2015

Hedging crude oil with options – a detailed example

By Simon Gleadall, CEO of Volcube.

A typical introductory text on options will contain payoff graphs that relate to ‘long put’ or ‘long call’ positions. Hedging is often described as simply a case of ‘buying puts’ for downside protection or ‘buying calls’ for upside security. But the details of the actual executable trade are frequently glossed over. Here we are going to look at a more detailed example to illustrate a more realistic reflection of the hedging process.

Let’s assume a trader has a certain exposure to crude oil. Specifically, let’s say he is long $1 million dollars of crude whose shortest dated future is trading at say $100. This could be because he is part of a small energy company holding physical inventory. Or perhaps he is part of a speculative trading team on an Energy dealing desk. Whatever the reason, let’s suppose the trader wishes to fully hedge his position from this price and lower, but he still wishes to benefit from any subsequent rally in the price of crude. In this case, his wishes are not really compatible with a simple futures strategy; selling futures equivalent to his entire exposure would fully hedge the downside risk but would not allow the trader to profit from any upside rally. In this case, buying put options makes more sense to fulfil the objective. So let’s work through the rough calculations required in our hypothetical case.

Firstly, the trader needs to figure out his equivalent exposure in terms of futures contracts; (available on the relevant derivatives exchange website; for example cmegroup.com). Looking at the futures contract specifications for crude oil shows that each future has a contract unit of 1000 barrels. In other words, each future relates to 1000 barrels of oil. So at a price of $100, the futures contract is worth $100,000. Therefore, a 1 million dollar exposure is equivalent to 10 futures contracts. Now let’s turn to the options market. The first point to note is the option contract multiplier. This tells the trader to how many contracts of the underlying (in this case a futures contract) each option relates. The simplest case (and most common in the case of futures options) is for the option contract multiplier to equal 1. Each options relates to a single futures contract. Other common multipliers are 10, 50, 100 or even 1000 lots of the underlying. It is vital to be sure on the correct multiplier, otherwise the hedge may be anything from 1000 times too small to 1000 times too large!

Let’s assume the multiplier in this case is 1. Here then the trader needs to buy 10 at-the-money put options to fully hedge his position to the downside. If the crude futures drop in value, he can exercise his put options and sell 10 crude futures at the previous price, which neutralises his profit and loss. If the crude futures price rallies, his puts will expire worthless; the loss is the price paid multiplied by the quantity bought multiplied by the contract size. This is the cost of the hedge; if the puts cost say $3 each, the loss would be $3 * 10 * 1000 = $30,000. However if the crude price rallies, the trader’s original exposure has been maintained, so he will gain on this leg of the portfolio. The break-even is at $103; here the cost of the hedge has been met by the profit from the original exposure.

To summarise, the hedging trader must :

  • calculate a total $ exposure
  • convert this into an equivalent number of lots of the underlying/futures market
  • convert this into a requisite number of options contracts for hedging purposes

When a trader is hedging in a new market for the first time, it is certainly advisable to return to first principles and calculate the payoff from each element of the portfolio in dollars and cents, at various prices in the underlying. The most common error is to over or under hedge by a factor (usually relating to either the contract size or the option multiplier). Since these can involve several zeroes, double checking is a must.

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In trucker terms it seems to make more sense,

 

What is a fuel hedge?

Fuel hedging is a contractual tool some large fuel consuming companies, such as airlines, cruise lines and trucking companies, use to reduce their exposure to volatile and potentially rising fuel costs.

 

And that is turning a frown upside down. 

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The government is considering «hedge» in oil production

   
 

 
 

5/30/2017 0:00 
 
 Baghdad / follow-up to the morning 
Falah said Amiri, head of the Iraqi Oil Marketing Company (SOMO) said the government might consider hedging part of its crude oil production as a means of protecting revenue in the face of the risk of crude price volatility. 
Said Amiri, who is also Iraq 's ambassador to the Organization of the Petroleum Exporting Countries (OPEC), in a statement quoted by Reuters news agency: "It is part of our strategy in the future we may examine hedge for a portion of Iraqi crude .. SOMO suggests the idea at the present time has not been studied yet." 
It helps hedge in the short term to reduce price fluctuations between the time of signing the sale of oil contracts for delivery time and payment of value.
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14392.jpg
   

Economy News Baghdad :

Confirmed the head of the company marketing the oil of Iraq ( SOMO ) , Falah al - Amiri, said his country has been studying the hedge in the part of the production of oil raw as a means to protect the revenues of government in the face of the risk of volatility of the prices of crude .

Said Amiri, which is also the representative of Iraq to the Organization of the countries exporting oil ( OPEC ) , in an interview seen by the " Economy News " , " from the part of our strategy in the future we may examine hedge for a portion of the crude Iraqi .. SOMO suggests the idea of the time the current has not been studied after . "

Not the obvious kind of hedge that has studied by SOMO . Seeking some institutions, such as Pemex , which has a monopoly of oil in Mexico, to ensure the sale of oil at a price fixed and content throughout the year , while hedge others such as Shell lobby . BV in sales against the volatility of the prices of oil in the term short .

It helps hedge in the term short to reduce the volatility of price between the time of the signing of contracts for the sale of oil and the time of delivery and repayment value .

He added Amiri " There are a lot of requirements that must be implemented first , a need to study the hedge well and train people need to know the best companies operating in the hedge .. What we still do not understand the process of hedge in full " , noting that " not to be sure that Iraq will adopt the practices of hedge ".

He pointed to the " SOMO aims to use tools such as auctions and projects common to promote the interests of Iraq 's oil and reduce the import of products of oil ."

And founded Somo and Atasko Russian company joint trade in Dubai to market crude for from joining it to producers other region of the Middle East are buying and selling oil to boost their income .

In the month , last it sold SOMO 's first shipment of crude Basra light from through bidding in the Stock Exchange Dubai Energy , which has become a platform for the discovery of the price . Being the marketing of raw Omani , which is sold in Asia in the Stock Exchange Dubai 

 

Views 0   Date Added 30/05/2017 - 13:00   Last updated 30/05/2017 - 13:00   No. Content 7703

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  • yota691 changed the title to of Iraq raises the first tender for the sale of oil in the Dubai Mercantile Exchange

of Iraq raises the first tender for the sale of oil in the Dubai Mercantile Exchange

Iraq raises the first tender for the sale of oil in the Dubai Mercantile Exchange

 

 28 minutes ago

 

Twilight News, trade sources / said that Iraq plans to sell four million barrels of Basrah Download August in a tender at the Dubai Mercantile Exchange on Tuesday, including the first sale of heavy crude Basra through the stock exchange.

One source said that the size of each shipment of Basra light crude and heavy two million barrels will be loading during the period between 26 and 28 August.

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Iraq raises the first tender for the sale of Basra crude heavy in DME

6/20/2017 3:21:00 AM 17 Number of readings
 

122062017_basraoil.jpg

 

 

 

Khandan -

Iraq raises the first tender for the sale of Basra crude heavy in the DME, according to trade sources. 

The news agency 'Reuters' from those sources as saying that Iraq plans to sell four million barrels of crude in August , Basra loading tender Stock Exchange Dubai Energy on Wednesday, including the first sale of heavy crude Basra through the stock exchange. 

He said one of these sources, the size of each shipment of Basra light crude and heavy two million barrels will be loading during the period between 26 and 28 of the month of August next.

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38 minutes ago
Last updated
03:30 PM
 
307
Watch
 
 
 
BAGHDAD / Tomorrow Press: 
reported commercial sources on Tuesday that Iraq plans to sell 4 million barrels of Basrah through Dubai Stock Exchange. 
The sources said that "Iraq plans to sell four million barrels of crude Basra download August at the Dubai Mercantile Exchange on Wednesday," stressing that "this is the first sale of crude Basra operation through this heavy stock market."
 

One source said that " the size of each shipment of Basra light crude and heavy two million barrels will be loading during the period between 26 and 28 August." 
The trade confiscated reported, Monday , 24 April, that the Iraqi Oil Marketing Company (SOMO) notified the buyer 's long - term, it plans to sell two million barrels of Basra Light crude, loading of June, through a tender Stock Exchange Dubai Energy.
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Just now, yota691 said:
38 minutes ago
Last updated
03:30 PM
 
307
Watch
 
 
 
BAGHDAD / Tomorrow Press: 
reported commercial sources on Tuesday that Iraq plans to sell 4 million barrels of Basrah through Dubai Stock Exchange. 
The sources said that "Iraq plans to sell four million barrels of crude Basra download August at the Dubai Mercantile Exchange on Wednesday," stressing that "this is the first sale of crude Basra operation through this heavy stock market."
 

One source said that " the size of each shipment of Basra light crude and heavy two million barrels will be loading during the period between 26 and 28 August." 
The trade confiscated reported, Monday , 24 April, that the Iraqi Oil Marketing Company (SOMO) notified the buyer 's long - term, it plans to sell two million barrels of Basra Light crude, loading of June, through a tender Stock Exchange Dubai Energy.

 

 

4 million barrels at $50 a barrel..........would that be an accurate assumption???

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CNN. Broadcasting The Announcement For Future Sales Of Iraqi Oil Through Another Country (Dubai) - That's INTERNATIONAL With A Capital 'I' !

 

 

 

Iraq raises the first tender for the sale of Basra crude in the Dubai Mercantile Exchange
 
20/06/2017 15:09:55  
 

BAGHDAD / obelisk

Trade sources confirmed on Tuesday that Iraq plans to sell four million barrels of crude Basra loaded in the tender in August DME next Wednesday, including the first sale of heavy crude Basra through the stock exchange.

One source said that "the size of each shipment of Basra light crude and heavy two million barrels will be loading during the period between 26 and 28 August."

The Dubai Mercantile Exchange has announced (April 30, 2017), that the government of the Iraqi Oil Marketing Company (SOMO) has sold two million barrels of Basra Light crude, delivered June 2017 through the stock exchange auctions platform.

The DME since it opened in 2007, is considered one of the specialized stock exchanges around the world, and became held by the president, a forward contract for crude Oman's third standard price of crude oil in the world, the only criterion for crude oil, which is exported from Oman and Dubai.

 

Source: Reuters - Follow-up to the disposal of the obelisk

 

 
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  • yota691 changed the title to Kuwait adjusts the pricing standard for its crude oil destined for Asia

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