Fuel offering and purchase management system

• US 8,326,731 B2
• Filed: 04/09/2007
• Issued: 12/04/2012
• Est. Priority Date: 04/09/2007
• Status: Active Grant

• Current Assignee: Goldman Sachs & Co. LLC (Goldman Sachs Group Incorporated), Samsung Electronics Co. Ltd.
• Original Assignee: Goldman Sachs & Company (Goldman Sachs Group Incorporated)
• Inventors: Kirch, Michael, Sharfman, Daniel, Sanghvi, Saurabh H.
• Primary Examiner(s): Lemieux, Jessica
• Application Number:
  US11/733,192
• Publication Number:
  US 20080249918A1
• Time in Patent Office: 2,066 Days
• Field of Search: 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/0283 Price estimation or determination
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

The present disclosure is directed towards apparatuses, systems and methods to facilitate the pricing, sales and delivery of a commodity fuel to a Customer. In one embodiment, the disclosure teaches a Fuel Offer Generator that facilitates the purchase and management of fuel offerings. The Fuel Offer Generator allows Customers interested in securing fuel to obtain an offer for fuel at lock-in prices for various tenors. Fuel Customers can buy these fuel offers such that they may later exercise the fuel offers so their fuel costs are locked-in at desired levels (e.g., they may be set to strike prices). The Fuel Offer Generator also can establish a Premium Price that will be part of the fuel offer. The Fuel Offer Generator may generate hedges to counteract fuel related risks stemming from fuel offer purchases. Ultimately, a customer that purchases a fuel offering can exercise their fuel offering order at a specified price and redeem any difference between the market price for their purchased fuel and the price specified in their fuel offering order. The Fuel Offer Generator employs a national average fuel price metric as well as consumer behavior to establish the pricing of fuel offerings.

Claims

1. A computer processor-implemented method to provide commodity offerings, comprising:

setting at least one commodity offering term for a commodity offering;

determining, by a computer processor, at least one commodity offering pricing value based on the at least one commodity offering term and at least one commodity offering pricing model for the commodity offering;

providing the commodity offering, including at least one association based on the commodity offering pricing value between a strike price and a premium, for selection by a customer;

receiving a customer selection of the at least one association;

processing, by the computer processor, a first payment from the customer, wherein the first payment is based on the customer selection and the premium;

processing, by the computer processor, a second payment to a retailer upon exercise of the commodity offering by the customer at the retailer;

processing a third payment, to the customer, wherein the third payment is based on a difference between the strike price and a geographically averaged commodity price;

recording, by the computer processor, selection and exercise of commodity offerings in a customer behavior database; and

modifying, by the computer processor, the at least one commodity offering pricing model based on the customer behavior database.

2. The method of claim 1, wherein the commodity is a fuel.

3. The method of claim 2, wherein the fuel is a vehicle fuel.

4. The method of claim 2, wherein the fuel is a heating fuel.

5. The method of claim 1, wherein the geographically averaged commodity price is a regional average commodity price.

6. The method of claim 1, wherein the geographically averaged commodity price is a national average commodity price.

7. The method of claim 1, wherein the geographically averaged commodity price is a multi-national average commodity price.

8. The method of claim 1, wherein the strike price is pre-selected and the premium is determined based at least in part on the strike price.

9. The method of claim 1, wherein the premium is pre-selected and the strike price is determined based at least in part on the premium.

10. The method of claim 1, wherein the commodity offering pricing model includes at least one commodity market variable.

11. The method of claim 10, wherein the at least one commodity market variable is a geographically averaged commodity price.

12. The method of claim 10, wherein the at least one commodity market variable includes any of:

wholesale gasoline over-the-counter options market data, wholesale gasoline over-the-counter forward market and futures market data, retail gasoline spot prices, wholesale gasoline implied volatilities, wholesale gasoline forward curve, spread of retail spot price over wholesale spot price.

13. The method of claim 1, further comprising:

determining whether the at least one association based on the commodity offering pricing value is satisfactory.

14. The method of claim 13, wherein the determining whether the at least one association based on the commodity offering pricing value is satisfactory, further, comprises querying a market information database for information to be used as a factor in determining whether said association is satisfactory.

15. The method of claim 13, wherein the determining whether the at least one association based on the commodity offering pricing value is satisfactory, further, comprises querying a customer marketing database for information to be used as a factor in determining whether said association is satisfactory.

16. The method of claim 15, wherein the commodity offering term is adjusted based on the determination of whether the association is satisfactory.

17. The method of claim 15, wherein the commodity offering pricing model is adjusted based on the determination of whether the association is satisfactory.

18. The method of claim 13, wherein the determining whether the at least one association based on the commodity offering pricing value is satisfactory, further, comprises querying a historical usage database for information to be used as a factor in determining whether said association is satisfactory.

19. The method of claim 18, wherein the commodity offering term is adjusted based on the determination of whether the association is satisfactory.

20. The method of claim 18, wherein the commodity offering pricing model is adjusted based on the determination of whether the association is satisfactory.

21. The method of claim 1, wherein the commodity offering term may include any of:

the strike price, the premium, a tenor, incentives, and a commodity type.

22. The method of claim 1, wherein the commodity offering pricing model comprises a commodity volatility model described by a stochastic differential equation.

23. The method of claim 22, wherein the commodity volatility model described by a stochastic differential equation is manifested in a Monte Carlo simulation.

24. The method of claim 22, wherein the commodity volatility model described by a stochastic differential equation is manifested in a grid-pricing scheme.

25. The method of claim 22, wherein the commodity volatility model described by a stochastic differential equation is manifested in at least one analytic formula.

26. The method of claim 1, wherein the setting at least one commodity offering term is based on a customer specification.

27. The method of claim 26, wherein the customer specification includes the strike price.

28. The method of claim 26, wherein the customer specification includes the premium.

29. The method of claim 26, wherein the customer specification includes a tenor.

30. The method of claim 26, wherein the customer specification includes a commodity type.

31. The method of claim 1, wherein the first payment is further based on the strike price for a specified commodity quantity.

32. The method of claim 1, wherein processing the second payment to the retailer comprises sending the payment to a distributor associated with the retailer.

33. The method of claim 1, further comprising:

storing commodity offering exercise information in a historical usage database.

34. The method of claim 33, wherein the commodity offering exercise information includes a location where the commodity offering was exercised.

35. The method of claim 33, wherein the commodity offering exercise information includes a commodity quantity on which the commodity offering was exercised.

36. The method of claim 1, wherein the exercise of the commodity offering is limited to a total commodity quantity specified by the commodity offering terms.

37. The method of claim 1, further comprising:

recording customer selection of commodity offerings in a customer selection database; and

executing a hedge based on entries in the customer selection database.

38. The method of claim 37, further comprising:

aggregating entries in the customer selection database into at least one similarity class prior to executing the hedge; and

executing the hedge based on similarity classes.

39. The method of claim 38, wherein aggregating entries is based on commodity offering terms.

40. The method of claim 38, wherein aggregating entries is based on commodity offering pricing.

41. The method of claim 38, wherein aggregating entries is based on customer characteristics.

42. The method of claim 38, wherein aggregating entries is based on risk considerations.

43. The method of claim 37, wherein the hedge includes purchase of at least one forward contract.

44. The method of claim 1, wherein the commodity offering pricing model is configured to output at least one price sensitivity value.

45. The method of claim 44, further comprising:

executing a hedge based at least in part on the at least one price sensitivity value.

46. The method of claim 45, further comprising:

analyzing the hedge based on a set of risk mitigation criteria; and

modifying the commodity offering pricing model based on the analysis.

47. The method of claim 1, wherein modifying the at least one commodity offering pricing model is based on a plurality of aggregated records stored in the customer behavior database.

48. The method of claim 47, wherein the plurality of aggregated records are aggregated based on commodity offering selection patterns.

49. The method of claim 47, wherein the plurality of aggregated records are aggregated based on commodity offering exercise patterns.

50. The method of claim 1, wherein the recording selection and exercise of commodity offerings in the customer behavior database comprises:

recording a location at which the commodity offering is exercised.

51. The method of claim 1, wherein the recording selection and exercise of commodity offerings in the customer behavior database comprises:

recording a time at which the commodity offering is exercised.

52. The method of claim 1, wherein the recording selection and exercise of commodity offerings in the customer behavior database comprises:

recording a commodity quantity on which the commodity offering is exercised.

56. The method of claim 1, wherein providing the commodity offering includes a plurality of associations between strike prices and premiums, and further comprising:

providing the plurality of associations between strike prices and premiums for selectable display to the customer, wherein the customer selection is received from the selectable display.

53. A computer processor-implemented system to provide commodity offerings, comprising:

a memory;

a computer processor disposed in communication with the memory, and configured to execute a plurality of processing instructions stored in the memory to;

set at least one commodity offering term for a commodity offering;

determine at least one commodity offering pricing value based on the at least one commodity offering term and at least one commodity offering pricing model for the commodity offering;

provide the commodity offering, including at least one association based on the commodity offering pricing value between a strike price and a premium, for selection by a customer;

receive a customer selection of the at least one association;

process a first payment from the customer, wherein the first payment is based on the customer selection and the premium;

process a second payment to a retailer upon exercise of the commodity offering by the customer at the retailer;

process a third payment, to the customer, wherein the third payment is based on a difference between the strike price and a geographically averaged commodity price;

record selection and exercise of commodity offerings in a customer behavior database; and

modify the at least one commodity offering pricing model based on the customer behavior database.

54. A non-transitory processor-readable medium, having processor-executable program instructions residing thereon, wherein the processor-executable program instructions are executable by a processor to:

set at least one commodity offering term for a commodity offering;

determine at least one commodity offering pricing value based on the at least one commodity offering term and at least one commodity offering pricing model for the commodity offering;

provide the commodity offering, including at least one association based on the commodity offering pricing value between a strike price and a premium, for selection by a customer;

receive a customer selection of the at least one association;

process a first payment from the customer, wherein the first payment is based on the customer selection and the premium;

process a second payment to a retailer upon exercise of the commodity offering by the customer at the retailer;

process a third payment, to the customer, wherein the third payment is based on a difference between the strike price and a geographically averaged commodity price;

record selection and exercise of commodity offerings in a customer behavior database; and

modify the at least one commodity offering pricing model based on the customer behavior database.

55. An apparatus to provide commodity offerings, comprising:

a memory;

a processor disposed in communication with said memory, and configured to execute a plurality of processing instructions stored in the memory to;

set at least one commodity offering term for a commodity offering;

determine at least one commodity offering pricing value based on the at least one commodity offering term and at least one commodity offering pricing model for the commodity offering;

provide the commodity offering, including at least one association, based on the commodity offering pricing value, between a strike price and a premium, for selection by a customer;

receive a customer selection of the at least one association;

process a first payment from the customer, wherein the first payment is based on the customer selection and the premium;

process a second payment to a retailer upon exercise of the commodity offering by the customer at the retailer;

process a third payment, to the customer, wherein the third payment is based on a difference between the strike price and a geographically averaged commodity price;

record selection and exercise of commodity offerings in a customer behavior database; and

modify the at least one commodity offering pricing model based on the customer behavior database.