Oil Producers Stop Hedging as Low Prices Lure Ships, Planes
- SocGen sees changing dynamics in producer and consumer hedging
- Lower oil prices may deter future shale oil investments
Oil Falls to Seven-Month Low
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The past month’s plunge in oil prices has turned the market for hedging upside down.
Oil producers have scaled back locking in future prices “considerably” since February, Societe Generale SA said in a report, citing a shift in options pricing driven by consumer companies like shippers and airlines. Late last year, sellers including U.S. shale drillers locked in prices in droves when benchmarks rose after OPEC announced plans to cut production.