Note you lock in providing the oil at a future date, so if there are delays in development and the spot price moves the wrong way you have a liability on the hedge that you need to meet, but may not have the production. Mining and oil firms without production thus need to be cautious about how much future production they hedge in case of delays. You are speculating not only on the price, but your actual output.
Note you lock in providing the oil at a future date, so if there...
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