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US oil producers prepare for 3rd year of low prices despite rally

Hedging has become a critical cash lifeline for companies that have so far survived a bust that has claimed dozens

Oil plummeted 38% in the second half of 2015 and 49% in 2014. There are already signs that a petrol supply glut may back up into the crude markets, damping demand.

New York

OIL producers are not betting on the rally. After surviving two years of low prices, they are gearing up for a third by buying protection against a renewed downturn. Laredo Petroleum Inc said on July 14 that it hedged more than two million barrels of 2017 output earlier this...