Risk Management

Assess Your Risk Exposure

Do you know how changes in fuel prices impact your bottom line? If fuel prices skyrocket, are you safe? If fuel prices plummet do you have risks in a different form? Does your fuel surcharge efficiently address your exposure, or are there blind spots that leave you vulnerable? Are you keeping up to date with factors and variables which will cause prices to fluctuate on a daily basis?

The world is interconnected now, and it only takes a small spark to send prices toppling or surging. Diversified Energy Supply can help you properly assess your risk exposure. DES will work with your team to create custom financial models to quantify the threats to your business. There are more of these than you’d think because of the global nature of business and the volatility within so many crucial industries today.

By educating customers on the economic dangers they face, DES enables customers to gage their exposure and respond appropriately. This is a simple step in tackling a potentially massive problem but DES is here to walk you through your exposure and minimize risk in a variety of key areas within the industry.

Adjust Your Risk Coverage

Standard futures contracts of 42,000 gallons per month work well if your price exposure is 42,000 gallons per month and is isolated in the New York Harbor region of the United States. If you have usage other than a standard NYMEX futures contract, then a standard contract does not pair well to your risk exposure. If you purchase fuel outside of the New York Harbor area, then a NYMEX fixed price contract does not fully address the price risk your company faces.

There are a number of variables which factor into price exposure outside of the New York Harbor area and knowing these variables is only the first step to minimizing your risk. Diversified Energy Supply’s Price Risk program allows you to customize physical fuel purchases to meet your individual risk profile. We work with companies of all different sized risk profiles. These range in the tens of thousands of dollars, but we meet their needs because we’re specifically designed to weigh a number of risk factors and variables.
DES can protect as little as one thousand gallons per month for a location. Diversified provides the flexibility to move locked volumes from one location to another allowing you to adapt your risk coverage as your business evolves. We will also tie your prices to where you buy fuel rather than fastening the economics exclusively to the New York Harbor.

This diversification of location is highly recommended and provides for adequate forethought into the dangers of relying on a centralized location for your fueling needs. Diversified’s flexibility in shielding odd-lot volumes and customer-specific locations allows customers to tailor their protection to best fit their risk exposure.

Avoid Risk Inducers

Price risk management’s role is to eliminate price risks. Diversified coaches our customers to understand the appropriate rationales for hedging and the mindsets that insert price risk exposure to the company instead of removing risks from it. We engage key management to document program goals and objectives and preserve the decision rationale with the knowledge that current market conditions inevitably will change.

It is possible to prepare for the worst and educate yourself and your business about the nature of risk and vulnerability in this industry.

We exist not only to actively change your risk management policies but educate your business on the why and when of understanding, acknowledging, and preparing for risk.  Let us show you how.  Contact us today.


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Account Application Package
To expedite the setup of your Diversied Energy Supply account, please follow the three simple steps below. Download the Account Application form by clicking here. Fill out the form completely omitting areas that do not apply. Submit the completed form to credit@diversified.energy