Fuel offering and purchase management system

• US 8,504,465 B2
• Filed: 12/27/2011
• Issued: 08/06/2013
• Est. Priority Date: 04/09/2007
• Status: Active Grant

• Current Assignee: Goldman Sachs & Co. LLC (Goldman Sachs Group Incorporated)
• Original Assignee: Goldman Sachs & Company (Goldman Sachs Group Incorporated)
• Inventors: Kirch, Michael, Sanghvi, Saurabh, Sharfman, Daniel
• Primary Examiner(s): Lemieux, Jessica
• Application Number:
  US13/337,616
• Publication Number:
  US 20120278141A1
• Time in Patent Office: 588 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 to facilitating pricing, sales and delivery of a commodity. In one embodiment, a Fuel Offer Generator 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 may later exercise the fuel offers so their fuel costs are locked-in at desired levels 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. While the Fuel Offer Generator may place various constraints on redemption, it will employ various consumer behavior metrics to establish the pricing of fuel offerings.

Claims

1. A computer processor-implemented method to generate fuel offerings, comprising:

determining, by a computer processor, a strike price and a premium price for a fuel offering based on a commodity offering pricing model;

establishing, by the computer processor, a usage restriction for the fuel offering;

providing the fuel offering for selection by a customer;

receiving, at the computer processor, a selection of the fuel offering from the customer; and

providing payment to the customer, in response to an exercise of a portion of the fuel offering by the customer, if the strike price is less than a retail price associated with the exercise and the usage restriction is satisfied.

2. The method of claim 1, wherein the usage restriction is satisfied if a total cumulative usage associated with the fuel offering is not exceeded.

3. The method of claim 1, wherein the usage restriction is satisfied if a maximum periodic usage associated with the fuel offering is not exceeded.

4. The method of claim 3, wherein the maximum periodic usage is a maximum monthly quantity of fuel.

5. The method of claim 1, wherein the usage restriction is satisfied if a minimum periodic usage has been met.

6. The method of claim 1, wherein the usage restriction includes a geographic zone and the usage restriction is satisfied if the exercise occurs within the geographic zone.

7. The method of claim 1, wherein the usage restriction includes a payment cap and the usage restriction is satisfied if a total of payments to the customer under the fuel offering has not exceeded the payment cap.

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

9. The method of claim 8, wherein the at least one commodity market variable includes one or more of:

a local retail fuel price, wholesale fuel over-the-counter options market data, wholesale fuel over-the-counter forward market and futures market data, retail fuel spot prices, and wholesale fuel implied volatilities.

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

11. The method of claim 10, wherein the commodity volatility model is manifested in a Monte Carlo simulation.

12. The method of claim 1, wherein the payment is based on a commodity purchase quantity and a difference between the strike price and the retail price.

13. The method of claim 12, wherein the payment is limited based on a maximum permitted amount of the difference between the strike price and the retail price.

14. The method of claim 1, further comprising:

recording the selection in a customer selection database that includes other customer selections; and

executing a hedge based on the customer selection database.

15. The method of claim 14, further comprising:

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

executing the hedge further based on the at least one similarity class.

16. The method of claim 15, wherein aggregating entries is based on at least one of:

the commodity offering pricing model, customer characteristics, and risk considerations.

17. The method of claim 15, wherein the hedge includes the purchase of at least one forward contract.

18. The method of claim 1, wherein the commodity offering pricing model is adjusted based on the payment.

19. A non-transitory computer processor readable medium including instructions that, when executed by one or more computer processors, direct the one or more computer processors to:

determine a strike price and a premium price for a fuel offering based on a commodity offering pricing model;

establish a usage restriction for the fuel offering;

provide the fuel offering for selection by a customer;

receive a selection of the fuel offering from the customer; and

provide payment to the customer, in response to an exercise of a portion of the fuel offering by the customer, if the strike price is less than a retail price associated with the exercise and the usage restriction is satisfied.

20. An apparatus to generate fuel offerings, comprising:

a memory including computer processor executable instructions; and

a computer processor disposed in communication with said memory, and configured to execute the instructions to;

determine a strike price and a premium price for a fuel offering based on a commodity offering pricing model;

establish a usage restriction for the fuel offering;

provide the fuel offering for selection by a customer;

receive a selection of the fuel offering from the customer; and

provide payment to the customer, in response to an exercise of a portion of the fuel offering by the customer, if the strike price is less than a retail price associated with the exercise and the usage restriction is satisfied.