TNK-BP Provides St. Petersburg Exchange with a New Diesel Fuel Sales Tool

Delayed shipment forward contracts enable companies with high oil-product consumption levels to offset their price growth risks. This exchange tool may prove attractive for private and state-owned companies with long-term budget planning, but primarily it would benefit transport companies.
Based on the trading session results, TNK-BP did not manage to sell the diesel fuel forward contract.
“TNK-BP intends to fall back on a broad range of exchange tools. Trading forward contracts is one of the first steps to transition to futures contracts in Russian exchanges. On the other hand the lack of demand for such tools shows that the market is not ready to depart from spot trading with immediate shipments. It would take time for the buyers to delve into the forward and futures trading systems. We believe that it would take some proactive measures on the part of the government to develop a stimulus package for exchange-based trade in general and forward and futures contract trading in particular. This will facilitate more accurate price forecasts for oil products and improve market transparency”, said Jonathan Kollek, Senior Vice President, Sales, Trading and Logistics, TNK-BP.

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