DTN Exchange® With Forwards Allows Buyers to Lock in Future Supply and Price in Fast-Moving Refined Fuels Industry
There is an important new enhancement to DTN Exchange®, the industry’s premier online trading platform. Fuel buyers using DTN Exchange can now secure forward contract needs online for up to 12 months. This enhancement, which is free to existing DTN Exchange customers, shows up as a new option on the Buyer menu.
Sellers who utilize DTN Exchange can create proprietary pricing formulas to execute prompt and forward supply contracts as well as manage volume discounts and capture load reservations based on daily rack postings. Buyers on DTN Exchange can purchase fuel at the speed of the Internet – reducing inefficiencies and lag time associated with multiple phone calls with sellers and freeing them from endless hours of monitoring markets at their desks. Electronic transaction data automatically integrates into back-office systems to speed contract, billing and payable processes and creates a “paper” trail for auditing and contract compliance initiatives for both buyers and sellers.
The first forward online trade using DTN Exchange was conducted between West Oil Company, a retail heating oil company and Sprague Energy, a supplier of energy and materials handling services in New England. Both companies were asked to share their experiences about using DTN Exchange:
“We spoke with our sales representative at Sprague Energy who demonstrated DTN Exchange. Buyers are able to enter the quantity needed, in the specified timeframe as well as an acceptable price range and then allow the system to do the work while they move on to other business,” said Bob West, president and owner, West Oil Company. “When purchasing heating oil on behalf of a customer, DTN Exchange really helps hit the numbers for both the client and the company. I’m looking forward to doing more business this way in the future.”
“Our customers are concerned about buying home heating oil now for next winter. DTN Exchange with forwards is user-friendly and allows companies to check prices online making it easier to make purchasing decisions, said David Daoust, managing director, Sprague Energy. “It’s extremely efficient and convenient and customers no longer have to wait to talk with a salesperson. Customers are able to check market pricing as needed.”
DTN Exchange helps sellers easily manage complex prompt and forward fixed-price contracts across terminals as the market moves throughout the day. Live prices based on NYMEX or Globex markets can move up and down enabling buyers to establish strike prices that may be automatically matched when market conditions allow. Or, if sellers prefer, they can create a flat price that doesn’t track with the index, but can reflect posted prices or market benchmarks and may be changed as desired. DTN Exchange also helps fuel sellers better manage supply and improves forecasting.
“DTN Exchange already assists fuel buyers and sellers in the downstream to make profitable business decisions based on real-time, market pricing information,” said Robert Gordon, chief executive officer, DTN. “The addition of forward capabilities provides the opportunity to take timely hedging action and secure forward contracts online for up to 12 months forward.”
Access to DTN Exchange pricing means buyers and sellers can conduct off-rack business 24-hours a day, enabling price and supply commitments during the day as well as after-hour bids. Buyers and sellers on DTN Exchange can beat market averages and optimize margins, while effectively managing risk, making DTN Exchange the most efficient, cost-effective alternative to buying and selling fuel based on standard rack postings.| DTN: 9110 West Dodge Road Omaha, NE 68114 www.dtn.com |
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