BLOOMBERG.COM
Look under the hood of the oil market and one thing becomes apparent -- shale producers seem to be hedging again.
Look under the hood of the oil market and one thing becomes apparent -- shale producers seem to be hedging again.
Demand for the contracts that producers use to guarantee price levels soared after 2018 West Texas Intermediate crude returned to $50 a barrel. At the same time a raft of trades were reported to U.S. regulators last week that showed some producers hedging at levels as low as $45 a barrel, according to data compiled by Bloomberg.
“We’ve witnessed a lot of producer interest as WTI moved towards $50 a barrel,” says Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA. A flatter oil futures curve and surging demand for put options are indicators of recent producer activity, he added.
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