Quote from: taseenb on February 28, 2018, 05:47:12 PM

Quote from: happyminer1 on February 28, 2018, 04:35:56 PM

What makes you believe that somebody buying petro options with this contract will receive a discount of 40%?

Sorry 30% (not 40%), my mistake.

From the White Paper (page 21):
This first lot, which will be placed in the Pre-Sale, will have a volume of 3,400,000 Petro and will have a 30% discount on the reference price of crude oil in the Venezuelan basket. The following lots will have 5,000,000 Petro and the discount will decrease successively for each lot sold, until the last lot, of 24,000,000 Petro, which will have no discount.

Quote from: taseenb on February 28, 2018, 03:31:49 PM

Quote from: STT on February 28, 2018, 02:04:29 PM

1) So even a speculator might find it best to take part in a secondary market rather then directly.

2) I believe most markets are set by the largest parties involved. Thats why Im surprised its not possible to just buy oil with these tokens and then surely there is an immediate demand and it helps create an order book useful by business?

3) Free markets always set a price, I dont believe its possible to force a price as there is always an arbitrage effect that occurs.

1) Why? If they sell you Petros with a 40% discount on the oil barrel, and you are a speculator, you definitely want to buy (and that's why there were 170 thousand offers).

2) No, IT IS POSSIBLE to buy oil with Petros, this is the main reason of it! The national oil company PDVSA will accept Petros obviously (that's totally confirmed, and probably also other cryptos!).

3) Sure, Petro will be traded in the secondary market and obviously the market will decide its price. But depending on the exchange mechanism the government will offer, its price base could actually be the oil barrel (about 60$ at the moment).

I see this discount will create a great incentive to be involved and buy the oil using Petro. So encouraging adoption. Of course this is arbitrage effect, a discount allowing the purchase of oil at a lower price. Every ICO type setup does this discount to start participation and assure the community of a regular market so thats normal.

I was just arguing long term the market will set its own price by repeating these trades as it finds the oil in Venezuela cheaper relative to the market overall. How much of a discount the market wants in order to take market in Petro purchases we will have to wait and see.
Its possible long term the market will just keep on demanding a 30% discount in order to continue volume. That does seem a large amount but the point is nobody can force a price, its upto Petro to be easy to use and a reliable market. If it works out the discount will shorten so the oil supplied is paid at a higher price.

However it does require that oil can be supplied at this 30% discount to global oil prices. So this is a strain on Venezuela margins and requires great efficiency from them for a success. If they can take this strain, then maybe volume of production and sales can rise and margin discount lowers to Venezuela's benefit.
I guess all Petro has to do in order to be a success to the Venezuela regime is provide higher liquidity with lower costs then the US dollar and sanctions are imposing. I would guess it will still be some burden and either way Venezuela oil industry has to improve its efficiency of production to do well long term. Crypto cant alter the situation on the ground, Saudi Arabia still has the lowest costs to production even if Venezuela has the highest proven reserves in the world. Reserves and financially viable production are sometimes two points nowhere near each other unfortunately.

Every successful economy relies on its efficiency vs its competitors. I see that Petro might alleviate some of the Dollar problem for Venezuela but it cant change the requirement for better business Venezuela has nationally. I dont know how much of a discount they were already having to provide in dollar terms.
The lower oil price worldwide has put many regimes under strain, its arguably an ongoing 'tightening' effect and oil itself must compete against other viable energy options which have improved drastically such as solar power for example.