Re: [silk] Fuel Futures

[Rishab Aiyer Ghosh]

they're hedging prices, which is what big firms do all the time to reduce 
risk (take a bet against current trends while working along with current 
trends). the difference is that they are actually passing on the benefits 
of hedging to consumers. presumably they have bought oil at a contract rate 
significantly lower than what they are selling to consumers. as a one-way 
buyer, there is only so far they can go with a rate against the market.

At 23:53 15/05/2006, Kiran Jonnalagadda wrote:
I don't get this business. Exactly how does First Fuel Banks stand to
gain if customers only withdraw fuel when regular market prices are
higher? Are they banking on fuel prices crashing?