Oil groups hedge output
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.