Pricing a transfer option for oil

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)

UK and FR Prices 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).

As of now the UK price is 12 cent above US in the quarter one future. 22 cent in quarter 2 -12 cent in quarter 3 16 cent in quarter 4

So this option is intuitively already worth (12+22+16)/4=12.5 cent.

Transfer is only one way. Delivery is done from the first day of the quarter to the last (Q1 starts Jan 1).