Comment by timoth3y
2 days ago
Planet Money had a wonderful series of episodes where they did exactly this a few years ago.
https://www.npr.org/sections/money/2016/08/26/491342091/plan...
They traced the path of their barrel from purchase, to production, to refining, to the sale of the various hydrocarbon products.
It's a great listen.
Did they pay extra for the barrel itself? Surely that steel doesn't come for free.
Barrel is a unit of measure, like gallon.
I know that. But if you show up to an oil field and buy a barrel of oil, they're not going to give it to you in plastic bags.
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You can sell the barrel after you are done
Is there a market for barrels? - I would assume most oil is stored in tanks, transported via pipeline to harbor, loaded onto tanker and oil trucks with never seeing a barrel and the barrel mostly serving as a unit for calculation.
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I tried to buy a foot of yarn but no one offered it packaged in feet
Didn't the price of the actual barrel became more onerous than the product itself during covid?
My understanding from some of these articles is that oil isn't literally transported in barrels the vast majority of the time, it's in tanker trucks/rail cars/ships moving from source to refinery to retail the whole way. Part of what makes it fun to "buy a barrel of oil" is that you can't go many places and ask for a barrel, you need to bring the thing to put it in (like a tanker truck or rail car).
This is common for a huge number of products, ranging from cosmetics, consumables, pharmaceuticals, bottled water, etc.
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in one market oil prices even went negative so presumably, yeah.