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As WTI Trades Near $75 How Should You Hedge Your Oil Price Risk?

  
  
  

The prompt NYMEX WTI futures contract settled at $107.26/BBL on June 20th, the highest closing price for the prompt month futures contract this year. Since then, WTI futures have declined more than 30%, recently closing below $75/BBL for the first time since September 22, 2010 ($74.58/BBL as of last night).

November 2014 Oil & Gas Hedging Update

  
  
  

As all energy consumers, producers, traders and marketers are well aware, both spot and forward prices for crude oil and refined products have continued to decline significantly over the past month. Since our October update, Dubai crude oil and USGC fuel oil have led the complex lower, down 12% and 13.83%, respectively.

February 2015 Energy Hedging, Trading & Risk Management Seminar

  
  
  

Due to the continued strong demand for our energy hedging, trading and risk management training seminars, we will once again be hosting an Energy Hedging, Trading & Risk Management Seminar on 10-11 February 2015 in London.

An Introduction to Consumer Natural Gas Hedging - Part VI - Call Spreads

  
  
  

This post is the sixth in a series where we are exploring many of the hedging strategies which are available to commercial and industrial natural gas consumers. The first and second posts can be found via the following links: An Introduction to Consumer Natural Gas Hedging - Part I - Futures, An Introduction to Consumer Natural Gas Hedging - Part II - Swaps, An Introduction to Consumer Natural Gas Hedging - Part III - Basis, An Introduction to Consumer Natural Gas Hedging - Part IV - Call Options and An Introduction to Consumer Natural Gas Hedging - Part V - Costless Collars.

An Introduction to Consumer Natural Gas Hedging - Part V - Costless Collars

  
  
  

This post is the fifth in a series where we are addressing the various hedging strategies which are available to commercial and industrial natural gas consumers. The first and second posts can be found via the following links: An Introduction to Consumer Natural Gas Hedging - Part I - Futures, An Introduction to Consumer Natural Gas Hedging - Part II - Swaps, An Introduction to Consumer Natural Gas Hedging - Part III - Basis and An Introduction to Consumer Natural Gas Hedging - Part IV - Call Options. In the next post in this series we'll explore how commercial and industrial natural gas consumers can hedge with call option spreads.

An Introduction to Consumer Natural Gas Hedging - Part IV - Call Options

  
  
  

This post is the fourth in a series where we are exploring the various hedging strategies which are available to commercial and industrial natural gas consumers. The first and second posts can be found via the following links: An Introduction to Consumer Natural Gas Hedging - Part I - Futures, An Introduction to Consumer Natural Gas Hedging - Part II - Swaps and An Introduction to Consumer Natural Gas Hedging - Part III - Basis.  In future posts we'll explore how commercial and industrial natural gas consumers can hedge with collars as well as other strategies.

Mercatus Energy Advisors in Hong Kong & Barcelona

  
  
  

In the coming weeks we will be in Hong Kong and Barcelona (and most likely, surrounding cities/ countries as well) for industry events and meetings with clients. If you would like to meet with us while we are in either Hong Kong or Barcelona please let us know.

Chicago & Group 3 ULSD Basis Blowouts Provide Fuel Hedging Lesson

  
  
  

On Friday Chicago ULSD spot prices jumped $0.1875/gallon putting Chicago spot prices at $0.29 over November NYMEX ULSD futures, the highest Chicago ULSD has traded vs. NYMEX since May 2013 when it traded at $0.33 over NYMEX. Similarly, Group 3 ULSD spot prices increased $0.0525 to $0.2625 over NYMEX ULSD futures, the highest it has traded vs. NYMEX since distillate basis differentials began referencing the NYMEX ULSD futures (previously distillates basis differentials referenced NYMEX heating oil futures). What's driving Midwest prices higher? Maintenance at refineries throughout the Midwest and strong agricultural demand for diesel.

Opportunistic Diesel Fuel Hedging Strategies as Oil Markets Collapse

  
  
  

As crude oil and refined products continue to decline, we're hearing from many commercial and industrial fuel consumers who are looking for "opportunistic" hedging strategies that will protect them against higher prices while not exposing them to downside price risk, should prices continue to decline from here. While most fuel consumers tend to hedge with traditional strategies such as swaps, call options and costless collars, markets with strong downward (as well as upward) momentum, such as the current one, tend to cause many hedgers to want to think outside of the box. 

An Introduction to Consumer Natural Gas Hedging - Part III - Basis

  
  
  

This post is the third in a series where we are exploring the various hedging strategies which are available to commercial and industrial natural gas consumers. The first and second posts can be found via the following links: An Introduction to Consumer Natural Gas Hedging - Part I, and An Introduction to Consumer Natural Gas Hedging - Part II.  In future posts we'll explore how commercial and industrial natural gas consumers can hedge with options and more complex instruments.

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