A hedger takes a long position in an oil futures contract

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A hedger takes a long position in an oil futures contract on November 1, 2009 to hedge an exposure on March 1, 2010. The initial futures price is $60. On December 31, 2009 the futures price is $61. On March 1, 2010 it is $64. The contract is closed out on March 1, 2010. Explain what gain is recognized in the accounting year January 1 to December 31, 2010? Each contract is on 1000 barrels of oil.

Reference no: EM13363926

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