Thursday, 5 January 2012

Companies cautious on hedging in headline-driven #energy markets

Energy-intensive companies are reluctant to pursue aggressive hedging programmes in the current market environment, where headlines are having a disproportionate effect on prices compared with the fundamentals, say consultants

Downward price pressure from mild weather and the eurozone crisis is further discouraging corporates to hedge at this time and risk locking in higher prices. However, uncertainty over Iran has been keeping oil prices buoyed so far this year. The possibility of sanctions disrupting Iranian supply, the fourth largest in the world, has helped keep Brent futures at an all-time high average of $111 a barrel in 2011, according to research by Barclays Capital.

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