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What is basis risk? Explain how an oil producer might hedge their future price exposure using futures and in particular how to minimize basis risk.
What is basis risk? Explain how an oil producer might hedge their future price exposure using futures and in particular how to minimize basis risk. In April WTI oil future prices for the June delivery went negative. Based on factors that affect future prices discuss how this might have happened, how it might impact on basis risk and the possible impact on oil producers who hedged their future income using futures?
What is basis risk? Explain how an oil producer might hedge their future price
exposure using futures and in particular how to minimize basis risk. In April
WTI oil future prices for the June delivery went negative. Based on
factors that affect future prices discuss how this might have happened, how it
might impact on basis risk and the possible impact on oil producers who hedged
their future income using futures?
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