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Canadian, Brazilian oil producers lock in revenues as prices rallyApr 1, 2019 07:30
Oil producers in Canada have jumped on an opportunity to lock in revenues for 2019 and 2020 as average crude futures for those years have soared over 20 percent to their highest levels this year, sources familiar with the deals said.
Brazil’s state-run oil giant Petróleo Brasileiro SA was also executing a part of its annual oil hedge last week, dealers and banking sources said.
Canadian oil is priced against U.S. crude futures, and producers use a combination of the benchmark futures and other financial tools to protect against fluctuations in prices.
After crashing more than 40 percent in the fourth quarter, oil prices have rallied after the Organization of the Petroleum Exporting Countries and its allies began to curb supplies since the start of the year. Falling output from Iran and Venezuela because of U.S. sanctions have also supported the market.
Last week, there was a massive spike in activity in crude swaps, one of the most popular tools used for hedging.
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