Refiner/marketer uses futures to manage inventory exposure, procure oil

Journal Article · Mon Jan 23 04:00:00 EST 1989 · Oil Gas J.; (United States)

OSTI ID:6439254

Zanussi, D E

The concept of hedging using future markets is not as new for agricultural businesses as it is for the petroleum business. Farmer's Union Central Exchange Inc. (Cenex) is involved in both agricultural and petroleum markets. And Cenex management recognizes the economic function of futures markets through years of manufacturing and merchandising livestock feed using the futures markets in Chicago. The integration of the New York Mercantile Exchange (NYMEX) and Cenex's petroleum business to reduce price risk is a necessary business function. As an integrated refiner and wholesale marketer, Cenex uses petroleum futures primarily to manage its inventory exposure, procure crude oil, and on a limited basis, to help exploration and production operations enhance or maintain a revenue stream over the short run.

• Research Organization: Cenex, St. Paul, MN (US)
• OSTI ID: 6439254
• Journal Information: Oil Gas J.; (United States), Journal Name: Oil Gas J.; (United States) Vol. 87:4; ISSN OIGJA
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
AGRICULTURE
ECONOMIC GROWTH
FORECASTING
INDUSTRIAL PLANTS
INDUSTRY
INVENTORIES
MARKET
PETROLEUM INDUSTRY
PETROLEUM REFINERIES
PRICES
RISK ASSESSMENT