Oil Pricing: Spot Market vs Long-Term Contracts

Why is so much crude oil traded on the “spot” (daily) market? Would’t producers prefer to sell under long term fixed price contracts? Granted, if the supply is uncertain, selling on the daily market can net you a lot of money.
Anyway, do the giants (like BP, EXXON, GULF, etc.) buy much of their oil under contract?

It’s a good question with no answers so far, so let’s see whether I can help kick things off:

It’s not clear that there is all that much trade on the spot market. Perhaps you can find a good citation, but this one says:

However, that doesn’t really address your question, since the contract arrangements, whilst outside the spot market, nonetheless appear typically to have adjustment clauses based on current prices.

That Energy Information Administration page suggests that greater reliance on spot or spot-derived prices came from a time when oil companies were trying to get too much out of fixed price arrangements:

The shoe is on the other foot now, I guess.

To WAG a little now: now that there’s a big futures market in oil and no shortages (in the sense of not being able to get what you want delivered at the going price) maybe we won’t see the return of fixed price contracts because parties can hedge as they wish.