Dec
05
American Shale Companies’ Rush to Hedge Is Turning the Oil Market Upside Down
By-
Oil futures curve flattens as producers hedge 2017-2019 output
-
WTI options volume surged to record after OPEC announced cut
U.S. shale oil companies are using the post-OPEC rally to hedge their oil price risk for next year and 2018 above $50 a barrel, bankers, merchants and brokers said, pushing the forward oil curve upside down.
The rush to hedge — locking in future cash flows and sales prices — could translate into higher U.S. oil production next year, offsetting the first output cut by the Organization of Petroleum Exporting Countries in eight years. As such, the producer group could end up throwing a life-line to a sector it once tried to crush…
American Shale Companies’ Rush to Hedge Is Turning the Oil Market Upside Down
