Brokers see futures mart taking over oil pricing
Energy users may be able to save money and know their energy costs in advance if commodity brokers succeed in tying No. 2 oil contracts to spot and future markets rather than on producer postings. Proponents of the plan point out that other commodities have shifted from posted to pricing contracts based on spot and futures markets and that this strategy can replace regulation with free-market pricing. An active futures market must exist for the plan to work, but supporters feel that hedging will increase competition in the oil industry and eliminate the many of the risks. A lack of liquidity and delivery problems are seen as barriers for heating oil in the futures market, but the large companies are indicating interest. (DCK)
- OSTI ID:
- 5402402
- Journal Information:
- Energy User News; (United States), Journal Name: Energy User News; (United States) Vol. 5:18; ISSN EUSND
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
COMMODITIES
CONTRACTS
FUEL OILS
FUELS
HEATING OILS
INVESTMENT
MARKET
OILS
ORGANIC COMPOUNDS
OTHER ORGANIC COMPOUNDS
PETROLEUM PRODUCTS
PRICES