The production of oil, including West Texas Intermediate (WTI), is a complicated process involving many aspects of the supply chain. Add to that the trading of energy futures, and there is a two-sided market that requires intermediary players. Fluctuations in that marketplace can have very adverse effects. A recent segment on the Planet Money podcast covered the downturn in WTI futures prices.
The entire podcast is excellence, and Team Volley was particularly intrigued by the early portion where Ernie Barsamian from The Tank Tiger described how the matching process works when oil must be stored. In this case, Ernie's firm coordinates getting the oil from the trucks and pipelines into the ships and storage tanks.
That supply chain usually works quite smoothly, but when the capacity of oil storage in the US was fully consumed, it sent the futures market into a spiral, resulting in prices as low as -$37 per barrel.
Whether it's WTI or an upstream aspect of oil production, the energy industry is a series of multi-sided markets where coordination makes the difference between healthy margins and negative prices. A clear need for matching engine technology to increase supply chain efficiency while minimizing risk and waste.
Volley Solutions works with a variety of organizations to foster interactive decision optimization. From supplier risk management to supply chain coordination, the Volley platform delivers a clear ROI. Interested? Let's talk.
Topics: matching, supply chain, energy