Diesel oil
About diesel oil
Diesel oil serves as fuel for diesel engines. Diesel is derived from crude oil extracted from the underground and later distilled through a refining process. Diesel oil is primarily used in the industrial and transportation sector. The majority of the world’s proven oil reserves are held by OPEC countries, which also account for approximately 40% of the global oil supply. Their production agreements have a significant impact on the price level of diesel oil. In Denmark, oil is extracted from the Danish-owned part of the North Sea. This extraction is scheduled to cease in 2050 due to a political decision by the Danish Parliament. This aligns with the climate target for 2050 of achieving carbon neutrality.
Hedging dielsel oil
The price of diesel primarily dependent on consumption and production. However, other factors also play a significant role in its pricing. Specifically, political initiatives and economic turbulence can create significant fluctuations in prices. Implementing a customized risk management solution enables the creation of budget predictability, allowing the focus to remain on the core business operations. If you are unable to pass on the cost of fuel to your customer, it can be advantageous to enter into a fixed-price agreement for fuel. This can provide stability to your budget, allow more focus on the core business operations, and demonstrate proactive measures to stakeholders such as banks, boards, and other interested parties.
Let us secure your bottom line
We are ready to assist with risk management of all kinds of energy products and services, so if your company’s budget is affected by energy price fluctuations, don’t hesitate to contact us!