oil hedges

Energy companies ramped up hedging activity as the demand and price shocks of the coronavirus pandemic roiled the oil and gas sector during the second quarter.

A new U.S. Energy Information Administration’s (EIA) analysis of 2Q2020 financial disclosures from 77 publicly traded domestic crude oil producers found that the companies collectively entered into hedging contracts covering 673 million bbl of crude oil for the following four quarters, up from 583 million bbl during the same period a year earlier.  

These companies accounted for 3.9 million b/d, or 36% of total U.S. crude oil production, in the second quarter, a large enough sample to provide a snapshot for the broader industry. Producers hedge to lock in prices or a range of possible prices that they will receive...