A “hedge” refers to financial protection established when investments are made into assets of high intrinsic value to reduce the risk of loss in vulnerable ones. With oil & gas, the hedge protects the U.S. Dollar against inflation due to its high demand and relative stability. The world runs on oil. It will always be in demand and always have value to society. Even in a fluctuating market, its relative low risk of loss and established demand continues to secure a place for oil & gas among investors.
- Economic Risk Assessment (Probability Theory)
- Production vs. Consumption
- Net Present Value
- Minimum Rate of Return