Several companies working at U.S. unconventional oil fields have put new hedging deals in place within the last few days, Bloomberg reported on January 7. These producers appear to be hopeful that they can take advantage of the gains that crude oil prices have made since January 3, when a top Iranian general was killed in a U.S. drone strike.
According to Bloomberg, the companies in question have been using spreads, collars and other options strategies in combination to lock prices in at current levels for oil extracted in 2020 and 2021. They began doing so after fears of rising tension in the Middle East drove Brent crude above the threshold of $70 per barrel for the first time in more than three months.
Bloomberg did not name any of the companies involved in the new hedges. It did say, though, that some firms working offshore UK in the North Sea had made similar arrangements.