Top Permian Oil Producer Pioneer to Minimize Hedging Next Year

Pioneer Natural Resources’ hedging losses have tallied over $2 billion so far this year, as oil prices rose above levels where it and some other producers had locked in sales contracts through hedges.

Liz Hampton, Reuters

Top Permian Basin oil producer Pioneer Natural Resources Co. will minimize its hedging next year, CEO Scott Sheffield said on Nov. 4, anticipating oil prices between $80/bbl and $100/bbl over the next several years.

Pioneer’s hedging losses have tallied over $2 billion so far this year, as oil prices rose above levels where it and some other producers had locked in sales contracts through hedges.

The company said it has no plans to add to hedges now, noting it was bullish on oil prices and there was more room for energy prices to move up than down. Oil producers use hedges as a form of insurance against sharp price reductions.

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