Eying higher oil prices, Pioneer Natural Resources to minimize hedging next year By Reuters

© Reuters. FILE PHOTO: The solar is seen behind a crude oil pump jack within the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant/File Picture

By Liz Hampton

(Reuters) – Prime Permian Basin oil producer Pioneer Pure Sources (NYSE:) will reduce its hedging subsequent yr, Chief Govt Officer Scott Sheffield stated on Thursday, anticipating oil costs between $80 and $100 a barrel over the subsequent a number of years.

Pioneer’s hedging losses have tallied over $2 billion thus far this yr, as oil costs rose above ranges the place it and another producers had locked in gross sales contracts by means of hedges.

The corporate stated it has no plans so as to add to hedges now, noting it was bullish on oil costs and there was extra room for power costs to maneuver up than down. Oil producers use hedges as a type of insurance coverage in opposition to sharp value reductions.

“I do assume that we’re getting in a really, very tighter market over the subsequent a number of years. Unused capability in OPEC+ goes for use up within the subsequent two years,” Sheffield stated on a convention name.

On Thursday, OPEC and its allies stated they might stay on target to lift output by 400,000 barrels per day from December, at the same time as the US has referred to as for extra provide to assist cut back costs.

Pioneer this week offered its Delaware Basin property to rival Continental Sources (NYSE:) for $3.25 billion.

Shares of Pioneer have been down about 2.6% at noon to $184.89 every, whereas Continental Sources was down 4.5% to $44.84.

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