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Effects of Hedging on Spot Prices?

BeamMeUp in Oil (General)

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BeamMeUp    + 11

ES

So I've been reading much of the lively discussions here about oil prices and inventories and demand and supply. I was reading another article that was talking about how US producers are not going to be able to take advantage of today's higher oil prices because they hedged their oil at $55 when oil was trading in the $40s. Goldman said almost half of US oil production is hedged at $57. So if half US production is trading hands--and will continue to trade hands--at $57, then what effect does that have on futures and spot prices? 

 

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