Buying Fuel in advance

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MikeAqua

7785 posts

Uber Geek

#1214827 14-Jan-2015 14:10

Buy oil futures now while the prices is low. When the prices increases sell them at close to current market rates, making a profit.

Do the same for NZD/USD.

Use profits to buy fuel later.

Mike

khull

1245 posts

Uber Geek

#1214853 14-Jan-2015 14:41

Prepaid fuel - you have identified a gap in the market. Strike now

I mentioned previously that people are more sensitive to an increase/drop in fuel price at the pump over what they would pay in their mortgages or credit cards. A 25 basis point increase can have a big effect on large loans

xlinknz

1127 posts

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#1214961 14-Jan-2015 17:24

Geektastic: We keep diesel on the "farm' so yes you can. Not sure I would want to keep petrol though.

I agree storing diesel is one thing petrol another the later is far more volatile and dangerous.

We also store diesel at home [in the garage]

Usually a 200L drum of commercial grade B100 biodiesel [yes we use B20 in our pug]

And 40-60L of mineral diesel in 20L plastic containers. These are used to maximize any supermarket 35 cent + promotions when they occur i.e. we fill up 100L on a single voucher. 50L in the car and 50L in containers. Basically it means we get the maximum value out of the voucher

Warpath

28 posts

Geek

#1215555 15-Jan-2015 16:27

With a little capital you can make 100's on oil in CFD's i've been playing the Oil CFD market since price was 68

Rather wait for 40's then look again because it may drop even further. Oil market is scary to be in right now long or short.

logo

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#1215587 15-Jan-2015 17:27

alasta: I have always wondered how long it takes petrol to go stale. I try to avoid having more than four weeks' supply in my car, but I don't know if it really makes any economic difference.

Well in the Walking Dead they're still driving around in cars quite a while after civilisation has been devastated so based on that, petrol lasts quite a while.

mdf

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#1215592 15-Jan-2015 17:48

Indirectly, via a financial contract (a "derivative", like a forward, option or CFD). As other's have noted, physical delivery requires very large volumes to get into. But you can get "cash settled" derivatives at a much more realistic volume.

You need to know what you are doing to get the maths/positions right, but you can effectively "lock in" a price of (say) $2 per litre. If (later on) the actual price of petrol was $2.20, essentially you would pay that to fill up, but then receive 20 cents per litre under your separate financial contract. If the actual price was $1.50, you would again pay $1.50 at the pump, but then be obliged to pay an additional 50 cents per litre under your financial contract. You eliminate the risk of petrol going up, but take on the risk of petrol going down.

This isn't financial advice, and the actual situation is a lot more complicated. Derivatives are complex and you should really know what you are doing, and never invest more than you can afford to lose (and note that with derivatives, you can magnify both gains and losses, so you can lose more than your initial investment, unlike more simple products likes shares and bonds - it's a bit like spread betting).

If you are interested, the most likely avenue is via a contract for difference, or CFD. Have a look at some of the more reputable brokers, such as CMC Markets or KVB Kunlun. The regulation in this area is changing under the Financial Markets Conduct Act, so the licensing is in a bit of flux. Members of the Financial Markets Association are probably a good place to start.

richms

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#1215604 15-Jan-2015 18:34

I have a couple of 20l plastic things I fill up whenever I get a decent discount from countdown on the catfood/trashbags/laundrypowder/dishwashing powder shopping trips.

Thats about the limit of my efforts to buy fuel ahead when it is cheap.

Richard rich.ms

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Trade NZ and US shares and funds with Sharesies (affiliate link).

frankv

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#1215853 16-Jan-2015 09:26

heylinb4nz:
networkn: I am not talking about buying it physically, I was sort of imagining somehow convincing a service station or petrol company to let me buy 1000L of 98 @ x and then me filling up as needed until my allocated amount was used up.

Wouldnt really be worth their while 1000 litres is only $30 in their pocket. What if prices go up next time they have to fill their tanks and you a havnt used your allocation ???

Might be worth it to get a customer locked into your brand or outlet though... once someone has a contract, they're going to be in your cafe/chocolate bar shop every week. And they're unlikely to go to the opposition for any extra they need, even if the opposition floating rate is cheaper.

mrdrifter

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#1215905 16-Jan-2015 10:25

These are used to maximize any supermarket 35 cent + promotions when they occur i.e. we fill up 100L on a single voucher. 50L in the car and 50L in containers. Basically it means we get the maximum value out of the voucher

I'm not sure how people manage this as all of the vouchers I have received are limited to 50L where do I find these unlimited fills?

nzkc

1572 posts

Uber Geek

#1215986 16-Jan-2015 11:18

This is called hedging. It is certainly possible to do as large companies (airlines, haulage etc) do this already. Its a way to manage your costs so that you can more accurately predict them from the year. You insure yourself against massive price swings by effectively paying a small premium over the estimated average for that time period.

I looked into it a number of years ago for my father in law when he ran a smallish cruise boat. I did find a company that would do it but the volume of diesel he would have to hedge against was way too high for the amount of diesel he needed.

So the companies are out there but (unless things have changed) you have to be a very high consumer of fuel.

Companies that hedged 6 months ago for 12 or longer months are probably kicking themselves at the moment.

wellygary

8328 posts

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#1216011 16-Jan-2015 11:46

nzkc: Companies that hedged 6 months ago for 12 or longer months are probably kicking themselves at the moment.

Especially when copy like this is beginning to pop up

BP sees $50 oil for three years

http://www.bbc.com/news/business-30827910

heylinb4nz

656 posts

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#1216067 16-Jan-2015 12:55

wellygary:
nzkc: Companies that hedged 6 months ago for 12 or longer months are probably kicking themselves at the moment.
Especially when copy like this is beginning to pop up
BP sees $50 oil for three years
http://www.bbc.com/news/business-30827910

Banks and financiers getting burned sounds great, those bastards have had it coming for a long time with the games they play.

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