US shale oil producers are expected to suffer more than $10 billion in derivative hedging losses this year if oil prices remain around $100 a barrel, Rystad Energy has said.
Many shale operators offset their risk exposure through derivative hedging, helping them to raise capital for operations more efficiently, the Oslo-based energy research company said on Tuesday.
Producers who hedged at lower prices last year are in line to suffer significant losses as their contracts mean they cannot capitalise on the high prices, it said.
The sheer scale of the losses has resulted in companies spending hundreds of millions of dollars to exit their positions.
“With huge losses on the table, operators have been frantically adapting their hedging strategies to minimise losses this year and next,” said Rystad Energy vice president Alisa Lukash.
“As a result, we may not have seen peak cash flow in the industry yet — which is hard to believe, given the soaring financials reported in recent weeks.”
Shale producers can lose money on hedges in a couple of ways. Companies using “collars” to insure against a downturn will buy put options that allow them to sell their oil at a predetermined price.
But to fund those puts, they simultaneously sell bullish call options that pay a premium while capping their exposure to higher prices.
Those hedging with swaps can incur losses when prices rise above the fixed levels at which they are sold.
Oil prices have remained volatile this year. Brent touched about $140 barrel in March. However, it gave up most of its gains in the last few months as concerns grew over the possibility of a recession hitting fuel demand globally.
In July, the International Monetary Fund lowered its growth forecast for the global economy to 3.2 per cent this year, from its previous forecast of 3.6 per cent in April, owing to Russia’s war in Ukraine, high inflation and the Covid-19 pandemic.
Brent, the global benchmark for two thirds of the world's oil, was trading 0.48 per cent lower at $94.64 a barrel at 6.42pm UAE time on Tuesday.
West Texas Intermediate, the gauge that tracks US crude, was down 0.39 per cent at $89.06 a barrel.
Hedging paid off during the coronavirus-induced crash of 2020 but turned painful as recovering economies and Russia’s war in Ukraine lifted energy prices to historic highs.
“Anticipating the significant negative impact of these hedges, shale operators made a concerted effort in the first half of this year to lower their exposure and limit the impact on their balance sheets,” Rystad said.
Many operators have successfully negotiated higher ceilings for 2023 contracts and, based on current reported hedging activity for next year, even at a crude price of $100 per barrel, losses would total $3bn, a significant drop from this year, according to the research company.
“At $85 per barrel, hedged losses would total $1.5bn; if it fell further to $65, hedging activity would be a net earner for operators,” Rystad said.
Despite hedging losses, record-high cash flow and net income have been widely reported by US onshore exploration and production (E&P) companies this earnings season.
“These operators are now adapting their strategies and negotiating contracts for the second half of 2022 and 2023 based on current high prices, so if oil prices fall next year, these agile E&Ps will be able to capitalise and will likely boast even stronger financials,” Rystad said.
E&P companies typically employ derivative hedging to limit cash flow risks and secure funding for operations.
US shale operators currently have 42 per cent of their total guided and estimated oil output for 2022 hedged at a WTI average floor of $55 a barrel.
Overall, producers have hedged 46 per cent of their expected crude oil output for the year.
In the second quarter, companies reported an average negative hedging impact of $21 a barrel on their realised crude prices — the value they receive for production minus any negative hedging impact.
Fewer companies reported any significant effect on their derivatives contracts in the latest quarter, compared with the previous three months.
“An analysis of the difference in the hedging impact on realised prices per operator between the first and the second quarter shows that in most cases, second-quarter losses were stronger by $4 per barrel on average,” Rystad said.
The 15 players selected
Muzzamil Afridi, Rahman Gul, Rizwan Haider (Dezo Devils); Shahbaz Ahmed, Suneth Sampath (Glory Gladiators); Waqas Gohar, Jamshaid Butt, Shadab Ahamed (Ganga Fighters); Ali Abid, Ayaz Butt, Ghulam Farid, JD Mahesh Kumara (Hiranni Heros); Inam Faried, Mausif Khan, Ashok Kumar (Texas Titans
Abu Dhabi traffic facts
Drivers in Abu Dhabi spend 10 per cent longer in congested conditions than they would on a free-flowing road
The highest volume of traffic on the roads is found between 7am and 8am on a Sunday.
Travelling before 7am on a Sunday could save up to four hours per year on a 30-minute commute.
The day was the least congestion in Abu Dhabi in 2019 was Tuesday, August 13.
The highest levels of traffic were found on Sunday, November 10.
Drivers in Abu Dhabi lost 41 hours spent in traffic jams in rush hour during 2019
Allardyce's management career
Clubs (10) - Limerick (1991-1992), Perston North End (1992), Blackpool (1994-1996), Notts County (1997-1999), Bolton Wanderers (1999-2007), Newcastle United (2007-2008), Blackburn Rovers (2008-2010), West Ham United (2011-2015), Sunderland (2016), Crystal Palace (2016-2017)
Countries (1) - England (2016)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
SNAPSHOT
While Huawei did launch the first smartphone with a 50MP image sensor in its P40 series in 2020, Oppo in 2014 introduced the Find 7, which was capable of taking 50MP images: this was done using a combination of a 13MP sensor and software that resulted in shots seemingly taken from a 50MP camera.
Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
ANATOMY%20OF%20A%20FALL
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EJustine%20Triet%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ESandra%20Huller%2C%20Swann%20Arlaud%2C%20Milo%20Machado-Graner%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%205%2F5%3C%2Fp%3E%0A
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Top tips to avoid cyber fraud
Microsoft’s ‘hacker-in-chief’ David Weston, creator of the tech company’s Windows Red Team, advises simple steps to help people avoid falling victim to cyber fraud:
1. Always get the latest operating system on your smartphone or desktop, as it will have the latest innovations. An outdated OS can erode away all investments made in securing your device or system.
2. After installing the latest OS version, keep it patched; this means repairing system vulnerabilities which are discovered after the infrastructure components are released in the market. The vast majority of attacks are based on out of date components – there are missing patches.
3. Multi-factor authentication is required. Move away from passwords as fast as possible, particularly for anything financial. Cybercriminals are targeting money through compromising the users’ identity – his username and password. So, get on the next level of security using fingertips or facial recognition.
4. Move your personal as well as professional data to the cloud, which has advanced threat detection mechanisms and analytics to spot any attempt. Even if you are hit by some ransomware, the chances of restoring the stolen data are higher because everything is backed up.
5. Make the right hardware selection and always refresh it. We are in a time where a number of security improvement processes are reliant on new processors and chip sets that come with embedded security features. Buy a new personal computer with a trusted computing module that has fingerprint or biometric cameras as additional measures of protection.
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Top New Zealand cop on policing the virtual world
New Zealand police began closer scrutiny of social media and online communities after the attacks on two mosques in March, the country's top officer said.
The killing of 51 people in Christchurch and wounding of more than 40 others shocked the world. Brenton Tarrant, a suspected white supremacist, was accused of the killings. His trial is ongoing and he denies the charges.
Mike Bush, commissioner of New Zealand Police, said officers looked closely at how they monitored social media in the wake of the tragedy to see if lessons could be learned.
“We decided that it was fit for purpose but we need to deepen it in terms of community relationships, extending them not only with the traditional community but the virtual one as well," he told The National.
"We want to get ahead of attacks like we suffered in New Zealand so we have to challenge ourselves to be better."
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Global state-owned investor ranking by size
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UAE-based players
Goodlands Riders: Jamshaid Butt, Ali Abid, JD Mahesh, Vibhor Shahi, Faizan Asif, Nadeem Rahim
Rose Hill Warriors: Faraz Sheikh, Ashok Kumar, Thabreez Ali, Janaka Chathuranga, Muzammil Afridi, Ameer Hamza
School counsellors on mental well-being
Schools counsellors in Abu Dhabi have put a number of provisions in place to help support pupils returning to the classroom next week.
Many children will resume in-person lessons for the first time in 10 months and parents previously raised concerns about the long-term effects of distance learning.
Schools leaders and counsellors said extra support will be offered to anyone that needs it. Additionally, heads of years will be on hand to offer advice or coping mechanisms to ease any concerns.
“Anxiety this time round has really spiralled, more so than from the first lockdown at the beginning of the pandemic,” said Priya Mitchell, counsellor at The British School Al Khubairat in Abu Dhabi.
“Some have got used to being at home don’t want to go back, while others are desperate to get back.
“We have seen an increase in depressive symptoms, especially with older pupils, and self-harm is starting younger.
“It is worrying and has taught us how important it is that we prioritise mental well-being.”
Ms Mitchell said she was liaising more with heads of year so they can support and offer advice to pupils if the demand is there.
The school will also carry out mental well-being checks so they can pick up on any behavioural patterns and put interventions in place to help pupils.
At Raha International School, the well-being team has provided parents with assessment surveys to see how they can support students at home to transition back to school.
“They have created a Well-being Resource Bank that parents have access to on information on various domains of mental health for students and families,” a team member said.
“Our pastoral team have been working with students to help ease the transition and reduce anxiety that [pupils] may experience after some have been nearly a year off campus.
"Special secondary tutorial classes have also focused on preparing students for their return; going over new guidelines, expectations and daily schedules.”
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
As You Were
Liam Gallagher
(Warner Bros)
Day 1 results:
Open Men (bonus points in brackets)
New Zealand 125 (1) beat UAE 111 (3)
India 111 (4) beat Singapore 75 (0)
South Africa 66 (2) beat Sri Lanka 57 (2)
Australia 126 (4) beat Malaysia -16 (0)
Open Women
New Zealand 64 (2) beat South Africa 57 (2)
England 69 (3) beat UAE 63 (1)
Australia 124 (4) beat UAE 23 (0)
New Zealand 74 (2) beat England 55 (2)
Shubh Mangal Saavdhan
Directed by: RS Prasanna
Starring: Ayushmann Khurrana, Bhumi Pednekar
Quick%20facts
%3Cul%3E%0A%3Cli%3EStorstockholms%20Lokaltrafik%20(SL)%20offers%20free%20guided%20tours%20of%20art%20in%20the%20metro%20and%20at%20the%20stations%3C%2Fli%3E%0A%3Cli%3EThe%20tours%20are%20free%20of%20charge%3B%20all%20you%20need%20is%20a%20valid%20SL%20ticket%2C%20for%20which%20a%20single%20journey%20(valid%20for%2075%20minutes)%20costs%2039%20Swedish%20krone%20(%243.75)%3C%2Fli%3E%0A%3Cli%3ETravel%20cards%20for%20unlimited%20journeys%20are%20priced%20at%20165%20Swedish%20krone%20for%2024%20hours%3C%2Fli%3E%0A%3Cli%3EAvoid%20rush%20hour%20%E2%80%93%20between%209.30%20am%20and%204.30%20pm%20%E2%80%93%20to%20explore%20the%20artwork%20at%20leisure%3C%2Fli%3E%0A%3C%2Ful%3E%0A
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 240hp at 5,500rpm
Torque: 390Nm at 3,000rpm
Transmission: eight-speed auto
Price: from Dh122,745
On sale: now
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
UAE squad to face Ireland
Ahmed Raza (captain), Chirag Suri (vice-captain), Rohan Mustafa, Mohammed Usman, Mohammed Boota, Zahoor Khan, Junaid Siddique, Waheed Ahmad, Zawar Farid, CP Rizwaan, Aryan Lakra, Karthik Meiyappan, Alishan Sharafu, Basil Hameed, Kashif Daud, Adithya Shetty, Vriitya Aravind
The specs: 2018 Honda City
Price, base: From Dh57,000
Engine: 1.5L, in-line four-cylinder
Transmission: Continuously variable transmission
Power: 118hp @ 6,600rpm
Torque: 146Nm @ 4,600rpm
Fuel economy, combined: 5.8L / 100km
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
Results
International 4, United States 1
Justin Thomas and Tiger Woods (US) beat Marc Leishman and Joaquin Niemann (International) 4 and 3.
Adam Hadwin and Sungjae Im (International) beat Xander Schauffele and Patrick Cantlay (US) 2 up.
Adam Scott and Byeong Hun An (International) beat Bryson DeChambeau and Tony Finau (US) 2 and 1.
Hideki Matsuyama and C.T. Pan (International) beat Webb Simpson and Patrick Reed (US) 1 up.
Abraham Ancer and Louis Oosthuizen (International) beat Dustin Johnson and Gary Woodland (US) 4 and 3.
Results
5pm: Handicap (PA) Dh80,000 (Turf) 1,600m; Winner: Nadhra, Fabrice Veron (jockey), Eric Lemartinel (trainer)
5.30pm: Maiden (PA) Dh80,000 (T) 1,400m; Winner: AF Dars, Tadhg O’Shea, Ernst Oertel
6pm: Handicap (PA) Dh80,000 (T) 1,400m; Winner: AF Musannef, Tadhg O’Shea, Ernst Oertel
6.30pm: Handicap (PA) Dh80,000 (T) 1,200m; Winner: AF Taghzel, Malin Holmberg, Ernst Oertel
7pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 2,200m; Winner: M’Y Yaromoon, Khalifa Al Neyadi, Jesus Rosales
7.30pm: Handicap (TB) Dh100,000 (PA) 1,400m; Winner: Hakeem, Jim Crowley, Ali Rashid Al Raihe
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
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%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20HyperPay%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202014%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Muhannad%20Ebwini%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Riyadh%2C%20Saudi%20Arabia%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20FinTech%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%20size%3A%3C%2Fstrong%3E%20%2455m%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20AB%20Ventures%2C%20Amwal%20Capital%2C%20INet%2C%20Mada%20VC%2C%20Mastercard%2C%20SVC%3C%2Fp%3E%0A
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Profile box
Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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%3Cul%3E%0A%3Cli%3EFatigue%3C%2Fli%3E%0A%3Cli%3Enumbness%20and%20tingling%3C%2Fli%3E%0A%3Cli%3ELoss%20of%20balance%20and%20dizziness%3C%2Fli%3E%0A%3Cli%3EStiffness%20or%20spasms%3C%2Fli%3E%0A%3Cli%3ETremor%3C%2Fli%3E%0A%3Cli%3EPain%3C%2Fli%3E%0A%3Cli%3EBladder%20problems%3C%2Fli%3E%0A%3Cli%3EBowel%20trouble%3C%2Fli%3E%0A%3Cli%3EVision%20problems%3C%2Fli%3E%0A%3Cli%3EProblems%20with%20memory%20and%20thinking%3C%2Fli%3E%0A%3C%2Ful%3E%0A
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