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What would be the profit to the refiner

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A crude oil producer has 2 MMBbls crude and believes the market to be undersupplied. A refiner wants 2 MMBbls crude available on December 12. He has bought 2000 December NYMEX Crude futures contracts at $95 anticipating that the price of crude is going to rise between November and December. The producer agrees to sell 2MMBbls crude at the December Crude Futures Contract settlement price for that day's settlement. The crude oil will be delivered on December 9. Assume settlement price of $95.35. The refiner's long futures position will be exchanged for this physical supply. What would be the profit to the refiner?

Reference no: EM132354943

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