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You are a hedger who takes a long position in an oil futures contract on November 1, 2009 to hedge an exposure on March 1,
You are a hedger who takes a long position in an oil futures contract on November 1, 2009 to hedge an exposure on March 1, 2010. The initial futures price is $64. On December 31, 2009 the futures price is $63. On March 1, 2010 it is $69. The contract is closed out on March 1, 2010. Each contract is on 1000 barrels of oil. What gain or loss is recognized in the accounting year January 1 to December 31, 2010?
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