Atlas Risk Management Solutions for Oil and Gas

The Volatility Challenge - A Need for Pricing Contracts

Fuel price volatility is dominating today's petroleum markets. Reducing your exposure to the unexpected price fluctuations of the petroleum markets is an important part of ensuring profitability. 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 myriad of other industries. Atlas Oil's risk management team​ can help guide you to securing appropriate fixed pricing contracts to reduce your bottom line and more accurately project your fuel spend.

Fixed Price Contracts

Atlas' risk management team offers many different types of pricing contracts and utilizes their buying power and market expertise to pass the savings on to our customers. Some Atlas risk management solutions include hedging, Platts, OPIS, fixed price contracts, pricing caps and swaps and collars.

Every day our Atlas Risk Management and 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 risk management team's expertise combined with Atlas' buying power and storage capability means Atlas customers benefit from Atlas' industry knowledge and influence.

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Benefits of the Pricing Contract 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 Pricing Contracts:

  • Fixed Price Contracts – Customer locks a price for a set time period (Atlas' most popular pricing program)
  • Price Cap Contracts – Limits the upside price spike potential
  • Trigger Contracts – Agreed "basis" level that is set, then contract is triggered at a "Merc Level" that is advantageous
  • Price Collar Contracts – 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?