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If world oil prices were quickly swinging for the last few years because of the decline...

If world oil prices were quickly swinging for the last few years because of the decline in the U.S. dollar, changes in supply and demand how would hedging help with protecting (a random company’s) income in this case, how would you manage output so that you can maintain higher prices?
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In general, hedging is covering risk. The oil hedging means that the covering of risk against fluctuating oil prices. The oil hedging is a type of tool that used to set a cap of oil price for the period. It covers unexpected changes in oil prices. The producers can generally use the long hedge option to secure the purchase price of supply of oil that they need in the future period. In this process, the company can make a long term future contract with the crude oil companies and make a cap for the oil; then the oil company can allow hedging the oil price for some time. Suppose rise in the oil price; then oil company agreed to pay the oil at the contract price and this will cover the unexpected loss from the purchase of crude oil and it makes income stability of the company.

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