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NYMEX, ICE & EIA New Years Holiday Calendars

  
  
  

If you have hedging needs to take care of this week, the following are the New Years holiday calendars for NYMEX and ICE energy products, as well as the calendars for the EIA crude oil, refined product and natural gas data relases.

NYMEX, ICE & EIA 2014 Christmas Holiday Calendars

  
  
  

If you have trading needs to take care of this week, the following are the Christmas holiday calendars for NYMEX and ICE energy products, as well as the calendars for the EIA crude oil, refined product and natural gas data relases.

Mitigating Crude Oil Hedging Losses Caused by Three-Way Collars

  
  
  

On Friday we updated a previous post which explored oil and gas producer hedging with a strategy known as a three-way collar. As we noted in the updated post, many producers are currently experiencing significant oil hedging losses as a result of hedging with three-way collars as said collars include the sale of put options, many of which are currently in-the-money. While it’s not possible to eliminate these losses, there are strategies which can be utilized to ensure that the losses do not increase should prices continue to decline.

An Alternative Oil Hedging Strategy Using Three Way Collars

  
  
  

We've previously explored how both energy producers (see Hedging Oil Gas With Three Way Collars) and consumers (see Fuel Hedging With Three Way Collars) can hedge with a strategy known as a three-way collar. While these strategies have traditionally been comprised of the purchase of one option (a put in the case of a producer, a call in the case of a consumer) and the sale of two options (the sale of a call option and an additional put option in the case of a producer, a put and an additional call option in the case of a consumer), today we're going to address an alternative, three-way collar hedging strategy. The primary objectives of the alternative three-way collar is to minimize risk rather than improve strike prices, reduce premium costs or to generate cash flow (via the sale of the additional option), the objectives of the “traditional” three-way collar.

Hedging Oil & Gas With Three Way Collars

  
  
  

We originally wrote this post several years ago but due to a spike in traffic resulting from a recent Bloomberg article, Oil Crash Exposes New Risks for U.S. Shale Drillers, we thought it would be prudent to provide an updated perspective regarding oil and gas producer hedging with three-way collars. 

February Seminar Early Registration Discount Ends Next Week

  
  
  

The early registration discount for our next Energy Trading, Hedging & Risk Management Seminar, taking place February 10-11, 2015 in London, ends next Friday, December 26. To maximize your learning experience, the seminar will be limited to 20 participants. Register today and secure your seat.

December 2014 Oil & Gas Hedging Update

  
  
  

As a result of the continual decline in recent weeks, including signiciant sell offs on Thursday and Friday following OPEC's decision to keep their quota at 30MM BPD, spot and forward prices for crude oil and refined products have continued to decline significantly over the past month. Since our November update, Dubai crude oil and NWE fuel oil have led the complex lower, down 19.64% and 19.20%, respectively.

Meet Mercatus Energy Advisors in Spain and Southeast Asia

  
  
  

We'll be spending the better part of the next two weeks in Spain, Singapore, Mayalsia, Thailand and Philippines for industry events and meetings with clients. 

How Will Global Oil Markets React to Tomorrow's OPEC Meeting?

  
  
  

While the US energy markets will be closed for the Thanksgiving holiday tomorrow, nearly everyone who has any interest in the global oil and gas markets will be watching the headlines for any meaningful news to come out of the OPEC meeting in Vienna. As of last night, our best sources indicate that the cartel has so far been unable to reach a pre-meeting agreement. In addition, several, very interested, non-OPEC parties (i.e. Mexico, Russia) are also in Vienna trying to make their respective cases to reduce supply or not. We've also heard, but can't confirm, that IPAA (Independent Petroleum Association of America) has sent a respresentative(s) to Vienna to voice their opinion on the matter.

Is Vertical Integration A Sound Energy Hedging Strategy?

  
  
  

If you read our blog regularly you've likely to have read one of our posts regarding alternatives to hedging energy price risk with futures, swaps and options i.e. Oil & Gas Hedging Without Futures, Swaps & Options. Chevron ’s most recent quarterly earnings represent a successful application of one of these alternatives – vertical integration. In this post, we review how integration has served as a hedge for Chevron, including reviewing our checklist for when an integrated business is a sound hedging strategy.

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