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Posted by EconMatters


With a team of analysts, we at EconMatters focus on identifying the fundamental theories of cause and effect in the financial markets that matters to your portfolio.

OPEC Can Make Those Shale Hedges Lose Money at 55 Dollars Per Barrel (Video)

by EconMatters on November 27, 2016

in Commodities, Economy, Videos

By EconMatters


We discuss the idea that nobody else has thought of regarding how OPEC will actually hurt the Shale Industry by making all those financial hedges punitive, i.e., lose money above $52 a barrel on the front month with corresponding forward curve hedges all losing money for Shale Producers.

Shale Producers all put on “Financial Hedges” which start turning negative once the oil market busts out to new highs. So they will make money on their production sales, but lose money on their financial hedges as these forward hedges are strictly financial in nature. Thus, OPEC Can Stick It to the Shale Industry by raising prices above expectations!

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