Gas Producer Hedging Gains as Rally Chances Dim: Energy Markets
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Natural gas producers are increasing forward sales of their U.S. output for a second year, a sign they see little prospect that prices will rebound from their lowest level for any winter in the past nine years.
Energy companies have sold about 54 percent of their 2011 oil and gas production, up from 49 percent last year and 47 percent in 2009, according to a Barclays Capital analysis of 37 producers. By selling output now, companies ensure they get paid today’s prices for future production, a so-called hedge that protects them from declines.