The New York Mercantile Exchange is an electronic platform exchange, where buyers and sellers can trade various commodities any time, from a month from now to 18 months in the future. Also known as the Merc, it's also where fuel buyers or sellers can go to find a real-time cost for fuel supply agreements. These prices affect every market; spot, rack, and ultimately retail, which is why it is a key piece of the downstream fuel puzzle. According to OPIS, the Merc is “possibly the most influential factor in the upward/downward movement of wholesale rack markets” because of the transparency and benchmarking it provides.
The Merc allows refiners, suppliers, traders, jobbers, retailers, and procurement end-users to react and adjust to any fluctuations in the market; country conflicts, natural disasters, domestic refinery problems, or changes in domestic output. It provides consumers access to a visible cost basis for fuel supply agreements in real-time. This means that buyers are always aware of the cost basis of fuel agreements, enabling them to purchase the right fuel for the right area with the right price, and easily understand which factors make costs go up and down.
How do you translate this transparency to your own fuel wholesale business? Fuel buyers are increasingly discerning. This means that they are looking for new ways to buy refined products and reduce costs. Why would one of your customers buy at your rack price when the real-time RBOB contract just fell 4 cents? With the Gravitate Online Selling Platform, fuel buyers can buy a truckload or a bulk deal on a real-time price and you can keep inventory moving, even on a down-day.
The industry-leading Online Selling Platform provides a simple, self-service interface where marketers can efficiently transact with hundreds of customers while empowering them to buy when the market suits them. With this tool, customers can purchase fuel at the current market price or enter a bid which is then reviewed or approved automatically. Move more product, reduce flat-price risk and embrace the future with a personal demo today.
Source: OPIS
Image: CME