Below, you will see a pricing curve for Oil Futures. Your client is an oil producer (they are extracting oil from the ground and selling it to refineries) They wish to hedge their estimated production for March 2021, June 2021, and September 2021.

Oil Pricing Curve

June 2020 $52.35

Sept 2020 $51.00

Dec 2020 $50.05

Mar 2021 $48.10

June 2021 $47.15

Sept 2021 $44.25

Oil future prices are said to be in __________.

What hedge rates could your client lock into today for Mar21, Jun21, and Sep21?

On settlement date for each of the 3 hedges, assume the spot price of oil has dropped to $38.00 per barrel. Show the calculations (2 steps) of the settlement for each of the above three dates. ($38.00/barrel is the price for each of the three dates)