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Would buying heating oil futures be a hedge for #2 diesel ?
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obie_iaffa
Posted 2/10/2019 20:21 (#7312018 - in reply to #7307642)
Subject: RE: Would buying heating oil futures be a hedge for #2 diesel ?


NE Iowa
Can buy heating oil call options instead of buying futures. Doesn’t have quite the exposure that playing with futures contracts will leave you with. We did that back in late December. Fuel supplier does the same thing(calls it a ceiling no floor contract), they just pass the cost along to the customer plus a fee for their services. We run as trucking business and took physical delivery of a bunch of fuel around year end and feel having the position in our own account instead of our fuel supplier helps us offset the fuel that we are forced to purchase on the road. Booking fuel doesnt do any good when it can’t be put thur our pumps, that’s where he board or option position helps
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