E&P firms reluctant to hedge in wake of oil collapse
Having undergone a severe decline since late 2014, the price of crude oil has fallen still further in the past few months. That has made US shale producers reluctant to hedge for fear of locking in rock-bottom prices
Since the beginning of the shale revolution, US exploration and production (E&P) firms have used cheap financing, hedging and innovations in unconventional drilling to build a world-beating industry. With the help of soaring shale production, the US overtook Saudi Arabia to become the world's largest crude oil producer last year, producing 11.6 million barrels (bbl) daily, according to a June 2015 report by UK-based oil major BP.
Perhaps unsurprisingly, the surge has contributed to significant
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