European Oil Producers' Weak Hedging Shows Bet on Price Rebound
Producers' reluctance to lock in prices at current levels also shows they are expecting prices to rebound. If they were expecting prices to take another leg down, they would be happy to forward sell at current rates.
Their bets may be paying off already as oil prices have risen above $50 a barrel over the past week on optimism the world's crude producers can rein in output to an extent that will cut stubborn oversupply.
"Oil market rebalancing hasn't really kicked in yet," Durrant said, referring to the need for an oversupply in crude to clear in order for supply to fall in line with demand levels.
The Brent crude forward curve, prices indicating the future price of oil, is currently trading above $52 a barrel.
(Additional reporting by Ron Bousso, editing by Peter Millership)
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