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Husky puts on short-term hedges during refinery turnarounds

Published 2016-02-05, 06:09 p/m
© Reuters. Husky puts on short-term hedges during refinery turnarounds
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CALGARY, Alberta, Feb 5 (Reuters) - Canadian oil producer
Husky Energy Inc HSE.TO said on Friday it is implementing a
short-term hedging program to help protect itself from volatile
oil prices during turnarounds at its two major refineries in the
first half of 2016.
The Calgary-based company, which last month slashed its
capital budget by 27 percent, declined to comment on what
proportion of oil production it has hedged or at what price.
Benchmark U.S. crude prices CLc1 settled at $30.89 a
barrel on Friday, having hit a 12-year low of $26.19 a barrel
two weeks ago. O/R
Husky does not generally hedge production using financial
derivatives as its refining arm provides a natural cushion
against low crude oil prices, but production at its 160,000
barrel-per-day Lima refinery and 160,000-bpd Toledo refinery,
both in Ohio, will be cut during the upcoming turnarounds.
Six to eight weeks of maintenance are scheduled at Lima,
while there is 70 days of work planned at Toledo, a joint
venture with BP Plc BP.L , starting in April, according to a
source familiar with operations.
In a statement Husky said the program was expected to wrap
up mid-year once the turnarounds are finished.
"The objective of this short-term hedging plan is to support
the delivery of the 2016 business plan by limiting downside
price exposure in this volatile environment," the company said
in a statement.

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