US independents step up hedging

摘要

US upstream independents are increasing their oil and natural gas hedging activity to protect their balance sheets from a fall in prices. But they are proceeding cautiously, covering this year’s output and only part of 2017. Most are awaiting more clarity on price direction before locking in 2018 production. Companies face a dilemma-they do not want a repeat of the missed opportunity of a year ago, when oil prices recovered to close to $60/bl, but most refrained from hedging, amid expectations that the market was poised to rise further. Taking cover then would have helped cushion cash flows when prices fell back below $30/bl in January-March this year. But firms do not want to hedge most of their output at present prices of around $45/bl in case the market gains further ground and they lose out.