HOUSTON, Jan 14 (Reuters) - Energy producers have rushed to lock in oil prices since the United States announced its harshest sanctions yet on Russian energy trade on Friday, which sent oil prices surging to multi-month highs, market participants said.

Hedging activity hit a record high on the AEGIS Markets platform on Jan. 10, said Jay Stevens, director of market analytics at AEGIS. AEGIS says its clients represent about 25-30% of total U.S. oil production.

Hedging can help producers reduce risk and protect their production from sharp moves in the market by locking in a price. It can also give traders opportunities to profit from volatility.

Global and U.S. oil benchmarks rallied sharply on Friday and Monday, touching multi-month highs, after the United States announced new sanctions targeting Russian oil producers, tankers, intermediaries, traders and ports, aiming to hit every stage of Moscow's oil production and distribution chains.

"When we see moves like we have seen in the past few days, if a producer wasn't already very well hedged going into it, most will clearly want to take advantage of the higher prices," said Mike Corley, founder of advisory firm Mercatus Energy.

Corley noted that Mercatus clients have also taken advantage of higher prices over the past few days to hedge.

More than 2 million WTI light sweet crude oil futures traded on both Friday and Monday, the first time volumes exceeded 2 million since February and March 2022, the CME group said.

U.S. West Texas Intermediate futures eased $1.26, or 1.6%, to settle at $77.50 a barrel on Tuesday, after touching their highest level since August on Monday.

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https://www.reuters.com/business/energy/oil-hedging-hit-record-high-last-week-after-new-us-sanctions-russia-2025-01-14/