Will hedges be a savior to US shale producers again?

摘要

So far, independent crude producers in the US seem to be weathering the downturn better than many expected, and seem to bid fair to keep markets awash in excess oil for some time yet. While shale driller breakeven points may seem to be much lower than was previously thought, however, it is important to note that the current price of crude in many cases has little to do with the returns that a company sees on the barrel, as producers typically protect at least some of their output with hedges against low prices. At present, hedges that were set up before the downturn are still active, but as many companies have litde or no hedging in place more than one year into the future, it is uncertain what the fallout will be once current arrangements expire at the end of 2015.