A Beginner's Guide to Fuel Hedging – Futures

Given the significant volatility in fuel prices, a fuel-hedging program may be the answer. Also known as a futures contract, this standardized agreement between two parties for a specific quantity and quality of fuel at an agreed upon price can take the uncertainty out of buying this high cost but necessary commodity. From Mercatus Energy Advisors.

Given the significant volatility in fuel prices, a fuel-hedging program may be the answer. Also known as a futures contract, this standardized agreement between two parties for a specific quantity and quality of fuel at an agreed upon price can take the uncertainty out of buying this high cost but necessary commodity.

So how can you utilize futures contracts to hedge your exposure to rising fuel prices? Which of the primary types of futures contracts that are commonly used for hedging ULSD (ultra-low sulfur diesel) is right for your fleet? Whether your company owns or leases its fleet of vehicles, how can this practice ensure that fuel costs do not exceed your budgeted fuel price?

With a better understanding of the most common fuel hedging strategies available to commercial fuel consumers, you can make these decisions much more effectively.

For more information: https://www.mercatusenergy.com/blog/bid/81549/a-beginners-guide-to-fuel-hedging-futures

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