Government mulling oil hedge options
Published:Monday | April 20, 2020 | 5:13 PM
Finance Minister Dr Nigel Clarke has now asked the Bank of Jamaica to work with a Finance Ministry team to review Jamaica’s options for oil hedging.
Their advice will help the Government to determine the way forward.
Oil hedging locks in prices for the commodity based on a contract.
In a statement today, Clarke said over the past few weeks, a small Finance Ministry team has been working with its bankers and multilateral partners on the possibility of hedging Jamaica’s future oil supplies.
He said the Government has noted today’s unprecedented collapse in world oil markets where prices fell more than 99 per cent before going the negative but maintained that the hedging process cannot be rushed.
“Had we transacted based on prices a few weeks ago we would have regretted it today,” Clarke said.
He said the Finance Ministry team has been supplied with daily prices of hedging instruments which reflect significant uncertainty and expense.
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