Risk Management

The Volatility Challenge

Fuel price volatility is dominating today's petroleum markets. Intraday price variations used to be measured in fractions of a penny – but now it's not unusual for a 10 cent per gallon change within hours. The impact on your business can be financially troublesome. Every penny increase in the price of gas and diesel translates into millions of extra dollars spent by trucking, construction, and a myriad of other industries.

Fixed Price Contracts

Atlas offers many different types of contracts and utilizes its buying power and market expertise to pass savings on to our customers, such as hedging, Platts, OPIS, fixed and swaps & collars.

Every day our Atlas Product Supply Management team monitors the New York Mercantile Exchange-Commodity Trading (NYMEX) market. Our team identifies trends and significant swings 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.

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Benefits of the Contract Pricing Programs

  • Limit exposure to increasing price swings
  • Reduce risk in a highly volatile market
  • Provide an accurate budgeting and accounting tool
  • Program can be customized to cover all or only part of fuel requirements
  • Contract lengths are flexible (1-18 months)

Types of Contracts:

  • FIXED PRICE – Customer locks a price for a set time period (Atlas' most popular pricing program)
  • PRICE CAP – Limits the upside price spike potential
  • TRIGGER – Agreed "basis" level that is set, then contract is triggered at a "Merc Level" that is advantageous
  • PRICE COLLAR – A cap and a floor are set limiting upside risk, but, also limiting downside activity

Cost Control

If you are in a fuel intensive industry, diesel prices no doubt have a significant impact on your bottom line. If you don’t actively manage your fuel prices you could exceed your budget forecasts and pay the price with lower profit margins or even losses.

Is now the time to lock in your fuel prices?