Crude oil prices are down 60 percent off their peak and many are speculating that this trend has to reverse itself in the not-too-distant future. Now is a great time to lock in your fuel purchase with a fixed price contract.
Your financial budgeting success could hinge upon how well you manage your fuel costs. Yet, if you are like most companies, you don't have a plan or method for purchasing fuel. Atlas can help.
Every day our Atlas Product Supply Management team monitors the New York Mercantile Exchange-Commodity Trading (NYMEX) market. Our team identifies trends in oil prices. Our team's expertise combined with Atlas' buying power and storage capability mean Atlas customers benefit from Atlas' industry knowledge and influence.
According to the Energy Information Administration (EIA), a combination of news items indicating robust supply and weak demand growth helped to lower oil prices (Fig. 1). Although the U.S. economic data was strong, economic data in the rest of the world was generally below expectations. With most of the projected increases in future global consumption coming from outside the United States, disappointing international economic news had more influence on crude oil prices than positive U.S. data.
While this isn't good news in the crude oil industry, it is good news for businesses that need to purchase oil for their industrial and commercial business operations.
At Atlas, we want to help our customers get the best value from their fuel contracts. We offer a number of alternatives such as Fixed Price or Index Contracts. Here are the basic components of each:
Locks in a single price for a specified volume over a designated time frame.Benefits to customer:
- Cash flow management
- No surprises
- Reliable supply
- Competitive advantage when prices rise
- Customers who need ratable cash flows and budget targets (municipalities)
Locks in a floating differential to a NYMEX, Platts, or OPIS index.
Benefits to customer:
- Ability to take advantage of falling prices
- Can realistically participate in the market every day
- Highly customizable
- Reliable supply
- Customers who need the ability to pass on increasing costs (resellers)
- Customers with a large footprint who need a localized solution