U.S. drillers are insulating themselves against falling oil prices — a move that could prolong the global crude glut that the Organization of the Petroleum Exporting Countries is trying to drain.
American companies rushed to lock in higher prices for future deliveries of oil as the market recovered late last year, analysis of company disclosures by consultancy group Wood Mackenzie shows.
That threatens to keep oil flowing from U.S. fields throughout 2017, even if prices fall.
It’s another sign that U.S. drillers are making it harder for OPEC and 11 other exporting nations, including Russia, to reduce huge stockpiles of crude through coordinated production cuts.
“This is looking like a complete backfiring on OPEC and what they were trying to do,” said John Kilduff, founding partner at energy hedge fund Again Capital.
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