From Bloomberg.

A defense Canadian oil producers had against the plunging price of crude is crumbling as hedges expire amid projections that crude will continue to decline.

Hedges that shielded companies such as Crescent Point Energy Corp. and Whitecap Resources Inc. from the full pain of $30 oil are winding down this year and next. Nineteen small-to-mid-sized producers have an average of 19 percent of their crude hedged at about $58 a barrel this year, and only 3 percent at about the same price in 2017, according to data from Canadian Imperial Bank of Commerce. That compares with 27 percent at $71 for the same companies last year.

“When you look out to next year and beyond and as far as the eye can see, producers are fairly naked when it comes to price protection,” Michael Tran, commodities strategist at Royal Bank of Canada’s RBC Capital Markets unit in New York, said in a June 19 phone interview. They “are fully exposed to oil prices when it hurts the most.”

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