# Pricing transfer prices for oil hub? 390 Days of prices given

Need some input in how to attack this problem. Given are 8 timeseries:

• UK Oil price, Delivery Quarter 1 2020
• UK Oil price, Delivery Quarter 2 2020
• UK Oil price, Delivery Quarter 3 2020
• UK Oil price, Delivery Quarter 4 2020

and

• FR Oil price, Delivery Quarter 1 2020
• FR Oil price, Delivery Quarter 2 2020
• FR Oil price, Delivery Quarter 3 2020
• FR Oil price, Delivery Quarter 4 2020

The prices plotted (UK=BQ)

These prices are given for 390 days, starting in september 2017.

The question now is how to price the right to transfer oil from UK to FR. For the year 2020. Context: If UK price is above FR price, assume we can buy at the spot in FR and sell at the UK spot. If we have this transfer right.

The transfer right is bought for a full year and you pay whether you use it or not. You buy a daily transfercapacity and you can choose to not use it (if UK is cheaper than FR for example).

Transfer is only one way. Delivery can be executed between the first day of the quarter and the last (Q1 starts Jan 1).