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Hi David, Thanks for your reply, it really helped. I think I understand it now that with both strip and stack hedge, the oil producer is hedging all the oil he needs to deliver for the entire year, however, if the oil producer rolls a 100,000-barrel future contract every month, the oils he...

Hi David, I read this after 5 years it's been posted, and I really want to know why for the stack hedge, the producer has to long a one month future contract equaling the total value of the year's deliveries(assume he signed a contract to deliver oil every month for the next one year), and then...