Should we hedge

General Mineral Rights Discussion
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With the market up and down so much recently, I thought about hedging the price we receive for oil. We are royalty owners, not a producer. I’m told I can purchase put options with the example given that I’d pay $4.90 per month, per barrel to guarantee a $75/barrel floor. That would be a one year contract. That seems very expensive to me. Any thoughts on hedging?

Thx!

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There might be a time for it but I don’t think the time is now. I wouldn’t be thinking in terms of hedging unless I thought oil was going to crater.

1 Like
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Thank you! I tend to agree.

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