Producers rushed to lock in oil prices higher than US$50/bbl after OPEC's November announcement. Our peer group of the 33 largest oil companies with active hedging programmes added more volume of oil hedges during Q4 than in any of the previous four quarters. Those producers – most of which are highly exposed to US tight oil – are partially insulated from recent price weakness. Derivative gains will help fund part of the budget gaps that would result from sub-US$50/bbl oil prices.
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Surge in oil hedging exacerbates US supply glut
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Hedging Q4 2016 oil and gas derivative activity.pdf