On 1 March the price of oil per barrel is $53 and the July futures price is $58. On 1 June the price of oil is $55 and the July futures price is $57. A company entered into a futures contract on 1 March to hedge the purchase of oil on 1 June. It closed out its position on 1 June. 3.1 Determine the effective price paid by the company for the oil. 3.2 Did it take a long or a short position in the futures contract? Explain your answer