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by Stockwatch Business Reporter
West Texas Intermediate crude for February delivery added 86 cents to $77.85 on the New York Merc, while Brent for March added 80 cents to $80.80 (all figures in this para U.S.). Western Canadian Select traded at a discount of $12.15 to WTI, up from a discount of $13.60. Natural gas for February added 16 cents to $3.88. The TSX energy index added a fraction to close at 170.60.
Oil prices headed higher as the U.S. government reported the sixth consecutive weekly decline in U.S. crude inventories. In another bullish sign, U.S. shale major Pioneer Natural Resources disclosed on EDGAR that it is unwinding virtually all of its hedges for 2022. Companies use hedges to lock in prices for some of their production and thus cushion themselves from sudden declines. By removing its hedges, Pioneer is betting that oil prices will continue to rise this year. It will have to pay about $328-million (U.S.) to unwind the contracts, but for perspective, its hedging losses -- essentially a wrong-way bet on prices -- tallied over $2-billion (U.S.) in the first three quarters of 2021.
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