US Drillers Hedged Against Falling Oil Prices

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.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza