E&Ps Locking in Cash Flows and Sales Prices
OPEC’s agreement to cut production levels has kicked off a rush among shale oil companies to hedge their oil price risk above $50 for 2017 and 2018. The number of E&Ps selling oil for delivery next year has pushed the WTI forward curve into slight backwardation after two years of contango.

Source: Bloomberg

Compare this with Bloomberg’s chart published yesterday.

Source: Bloomberg

By locking in future cash flows and sales prices, producers will be more likely to result in higher U...


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