Oil groups hedge out­put

China Daily (Hong Kong) - - BUSINESS -

Ma­jor oil com­pa­nies in Texas’ Per­mian Basin have locked in an oil price of $50 a bar­rel for nearly two-thirds of their out­put for the rest of the year. Lo­cal media quoted con­sul­tancy firm HIS Markit re­port­ing that 18 shale drillers in the oil re­gion, lo­cated in the west of Texas — in­clud­ing Pioneer Nat­u­ral Re­sources, Pars­ley En­ergy and Laredo Petroleum — took ad­van­tage of higher oil prices ear­lier this year and hedged their pro­duc­tion. An­a­lysts said the move could shield them from much of the fi­nan­cial pres­sure to curb spend­ing for the next few months. De­spite the de­cline in oil prices in re­cent weeks, the pro­duc­ers are ex­pected to boost their out­put by a me­dian of 25 per­cent this year. In the Per­mian Basin, mul­ti­ple stacked lay­ers of oil-soaked rock have given oil pro­duc­ers a fi­nan­cial ad­van­tage over their ri­vals out­side the re­gion. They have hedged only 19 per­cent of their oil pro­duc­tion for the rest of the year. Fed’s pol­i­cy­mak­ing com­mit­tee said in a state­ment re­leased af­ter its two-day meet­ing. The Fed’s bal­ance sheet has bal­looned to around $4.5 tril­lion fol­low­ing three rounds of quan­ti­ta­tive eas­ing pro­grams, rolled out to counter the im­pact of the 2008 global fi­nan­cial cri­sis. With the US econ­omy back on track for steady growth, Fed pol­i­cy­mak­ers are prepar­ing to un­wind cri­sis-era poli­cies to avoid ig­nit­ing in­fla­tion­ary pres­sures or pump­ing up as­set bub­bles.

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