Reuters with a piece on the "a wall of financial hedges that will cap prices"
Before I start, this was out around 24 hours ago, so its not like it new news hitting the wires
I though it was useful and also educational from a 'support becomes resistance' point of view
- Last October, as U.S. oil prices seemed to be stabilizing around $45 a barrel, some bullish traders chuckled at the notion of U.S. shale firms racing to hedge production at what they thought was the bottom of a 19-month rout.
- Anadarko Petroleum and Chesapeake Energy were among the few to increase hedging in the fourth quarter ... Locked in prices ... just before crude tumbled a further $15 a barrel in the early weeks of 2016
- "The path higher for prices will be fairly slow and steady because once we get back to the $45-$50 range, you'll hit a wall of financial hedges that will cap prices," said Michael Tran, director of commodity strategy at RBC Capital Markets, who expects the market to rebalance in the second half of the year.
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Looking at the oil price chart I wonder if the cap will come in well below $45? Like, around $40?
