EUR-denominated diesel fuel hedge
PROBLEM: The energy market has been extremely volatile in recent months, given the uncertainty of the situation in the Middle East. This has been further exacerbated by market squeezes in European gas oil. This caused the price of EN590 to soar from $250 to over $400 per metric tonne. The current price of around $230 has been made more attractive for European clients with the recent rally in the euro.
In this case study, the corporate wants upside protection at around the current levels, but
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