We’ll outline our key objectives and what we will learn over the next two days, plus provide a summary of what is currently happening in the oil markets and how it affects your business.
The refining process is very complex – we’ll walk you through how gasoline and diesel fuel are produced and how they get from the refinery to the rack, and ultimately to the station or end-user tank.
Before you can learn to buy fuel smarter you must understand two key components of how racks are priced: the New York Mercantile Exchange (NYMEX) and U.S. spot markets. In this session, we’ll zero in on everything you need to know about the NYMEX.
Once you understand the NYMEX, we’ll explain how spot markets work and why they are so important to a wholesale fuel buyer at the rack. We’ll detail the intricacies of each of the seven U.S. spot markets and who the big players are in each of those markets.
Nearly all wholesale gasoline and diesel fuel transactions are based on rack prices. We’ll define what rack means, who posts prices, branded vs. unbranded, spot replacement costs, how taxes work, and the impact of the changing fuel slate.
Retail is perhaps the most complex link in the fuel chain. We’ll explain the five major classes of retail trade, how retail prices are determined and the huge challenge retailers face from hypermarketers.
Fuel Buying Workshop: Creating and Implementing a Successful Fuel Buying Plan
For the next four sessions, we will focus on creating a fuel buying plan for two very different fuel buyers – an end-user that buys about 20 million gallons annually, and a super jobber that purchases more than 300 million gallons per year.
Both companies face a multitude of challenges. For the end-user, the biggest challenge is to create a basic buying program that will keep trucks moving and not bust its fuel budget in this era of extreme volatility. For the jobber, the challenge is to leverage the large amounts of fuel that it purchases through various buying methods – branded, unbranded, spot, and some basic fuel hedging – in order to control its huge fuel costs.
Here we take step one – choosing a supplier. You’ll learn:
A rack benchmark is a cost basis that every fuel buyer needs to have and understand. The choices of which benchmark to use are numerous, and a bad decision can have very serious ramifications for the company’s fuel budget. In this session we’ll cover:
More and more rack transactions are being done off a spot pipeline price. In this session you’ll learn:
We’ll take an in-depth look at how super jobbers buy wholesale gasoline and diesel, and the unique challenges and risks that affect the way they do business and how they price fuel to resellers. Plus, we’ll discuss what many in the market are curious about – how do I become a jobber?
One of the most critical parts of any fuel buying plan is having a contract that works for both you and your supplier. You’ll learn the key do’s and don’ts involved in creating, negotiating and executing supply contracts and what you need to know both as a buyer AND a seller/reseller.
Guest speaker: Elaine Levin, President, Powerhouse, Inc.
Elaine has been managing hedging programs and helping end users, jobbers and others manage price risk for more than 30 years. In this special bonus hedging session, we’re going to create two market scenarios – one where prices spike, the other where prices collapse. Then, we’ll look at how each scenario impacts our fictional buyer and our fictional seller, and we’ll offer suggestions on particular hedging strategies. This is a cant-miss session for anyone interested in learning the basics of hedging from an industry expert.