Hedging

More than 45% of expected natural gas production in 2021 is hedged at a Henry Hub base price of $2.58/MMBtu, marginally lower than the 2020 price of $2.70, according to a Rystad Energy analysis of U.S. producers. The analysis also determined exploration and production (E&P) companies have to date hedged 41% of forecast 2021 oil…

U.S. explorers still have a lot of exposure to oil and natural gas prices in 2020 as the fourth quarter nears, but if oil prices move higher as many experts are forecasting, that strategy may prove to be a winner.

U.S. exploration and production (E&P) companies slightly increased their 2018 oil hedging during the second quarter, with 2019 still around normal levels, even though oil futures inched above long-term budgets of $50-55/bbl, according to a review by Goldman Sachs.

Regulators in the state of Washington on Monday launched a process for revising the approach of the state’s natural gas utilities toward hedging their future gas supply purchases.

U.S. and Canadian producers have hedged only 15% of total oil and natural gas volumes for 2016 and 5% of their volumes for 2017, which may leave them even more exposed to depressed prices.

Spending by U.S. producers is estimated to be down around 60% from 2014 — twice as much as some analysts have estimated, Raymond James & Associates Inc. said Monday. North American producers also have less protection from sustained low commodity prices than they did a year ago because of less hedging, according to Barclays Capital.

In what is envisioned as a multi-year program, Washington state regulators on Tuesday issued a primer for moving toward a more robust, risk-based natural gas hedging program for the state’s four major investor-owned gas distribution utilities.

The Commodity Futures Trading Commission (CFTC) has taken action on three issues that Chairman Mark Wetjen said will have a lasting impact on energy-end users that may have fallen victim to “negative, unintended consequences” of the Dodd Frank Financial Reform Act.

“If counterparties, such as banks…begin to disappear, our ability to manage our risk would be seriously impeded,” energy companies told Federal Reserve Chairman Ben Bernanke.