American Oil Is Underhedged and Heavily Exposed

American Oil Is Underhedged and Heavily Exposed

Hedging is a popular trading strategy frequently used by oil and gas producers, airlines and other heavy consumers of energy commodities to protect themselves against market fluctuations. During times of falling crude prices, oil producers normally use a short hedge to lock in oil prices if they believe prices are likely to go even lower in the future. With oil and gas prices hitting multi-year highs after Russia invaded Ukraine, producers that …