RE:RE:Desperation MoveI agree with management and some of the posters and am against hedging in general, and particularly when the Syncrude huge capex program of the last few years is going to be ending in about a year.
I look at hedging as insurance to protect the balance sheet from increasing debt to much in adverse oil price conditions. The last things I want is management thinking they can forecast oil prices and lock in prices and take away the upside. Downside risk is capable of being managed in other ways.
Also remember the futures price is always less than the expected price as the buyer is not interested in simply getting his money back. Somewhere around a 10% discount to expected value I think is normal. This means that the expected price is probably around $105 for a futures price of $95 in 1 year. That spread is a lot to give up particularly when the company has signaled very clearly that capex is set to plunge and it's debt ratios are investment grade.