• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 2 hours 60 mph electric mopeds
  • 1 hour COVID 19 May Be Less Deadly Than Flu Study Finds
  • 12 mins US-China tech competition accelerates: on Friday 05/15 new sanctions on Huawei, on Monday 05/18 Samsung chief visits China
  • 7 hours China to Impose Dictatorship on Hong Kong
  • 51 mins Russia loses its chance to capture the EU gas market
  • 2 hours Why 2030-Isn.t-The-Magic-Year-For-Electric-Vehicles
  • 1 hour Monetary and Fiscal Policies in Times of Large Debt:
  • 13 hours Iran's first oil tanker has arrived near Venezuela
  • 10 hours Payback Time: Republican Senators turn the tables on Democrats. The difference is the Republican investigations are legit.
  • 22 hours Norway horrified as new rates make EV charging prices higher than petrol
  • 1 hour So the President is on that Hydroxy
  • 2 hours DEFIANCE – There are More of Us Than Them
  • 21 hours Ventura County to Replace Natural Gas Generation with Battery Storage
The 5 Oil Tankers That Could Start A War

The 5 Oil Tankers That Could Start A War

Five oil tankers full of…

The EV Boom Could Accelerate Peak Oil Demand

The EV Boom Could Accelerate Peak Oil Demand

Car manufacturers are sticking to…

Prepare For Major Oil Market Consolidation

Prepare For Major Oil Market Consolidation

COVID-19 and the oil price…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

U.S. Drillers Rush To Hedge Production As Oil Prices Soar

U.S. shale producers have boosted their hedges to lock in higher oil prices for their production this year and next as oil prices shot up following the heightened tension in the Middle East at the end of last week, data compiled by Bloomberg shows.

Oil prices surged on Friday, following the assassination of Iran’s most powerful and visible military leader, Qassem Soleimani, by U.S. forces in Iraq. The attack was carried out following a direct order from U.S. President Donald Trump and was aimed at ‘deterring future attacks’ on U.S. diplomats and service members throughout the region.

Some U.S. shale producers took advantage of the price rally and placed additional hedges such as options strategies on Friday, to lock in high selling prices for 2020 and 2021, people with knowledge of the trades told Bloomberg.

The strategy to purchase financial options allows producers to ensure a minimum price for their crude oil and protect their revenues and production in case oil prices snap sharply back.

U.S. producers could benefit from these hedges and have relatively higher selling prices for their production at a time when shale production growth is slowing down and investors are rewarding discipline in spending and return on investments.

Apart from the U.S. producers, companies active in the North Sea have also increased hedging activity in recent days, traders told Bloomberg, after oil prices hit their highest level in seven months amid fears that a U.S.-Iran conflict may be imminent.

Early on Monday, the oil price rally continued, with Brent Crude prices exceeding US$70 a barrel for the first time since May last year. WTI Crude was also up, rising above US$64 a barrel, also the highest price level since May 2019.

On Tuesday morning, Brent Crude was down 0.8 percent at US$68.30 and WTI Crude was down 0.9 percent at US$62.71, as investors and speculators await an Iranian retaliation for Soleimani’s assassination, but are dialing down the panic that oil supply disruptions may be imminent.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News