The traders did best when they could take advantage of the enormous arbitrage between the lower prices in the term-contract market and the higher, more-volatile prices in the spot market. “The trader could be in a superb position,” observed a senior executive from one of the majors. “All he had to do was manage to get himself a term contract of some sort.” He could then turn around and sell it for eight dollars a barrel more on the spot market, making an enormous fortune for himself on a single cargo. And how did the trader obtain his fantastically lucrative term contract? “What he had to do
...more
