Cautious Hedging Costs U.S. Drillers Billions

A month ago, ConocoPhillips warned it would book a $600-million impairment to its first-quarter profits from its acquisition of Concho Resources and, as Reuters reported at the time, related oil price hedges. Now, it is emerging that Concho is not the only one that hedged too early. When the price of crude oil began to recover last year after a devastating first half of the year, U.S. oil producers began to hedge their 2021 output at higher prices. They hedged less than normally, Rystad Energy noted in an October report, at 41 percent of their…