Over the hedge

Oil M&A is back, with a slew of companies looking to do deals. Chevron is fighting with China’s CNOOC over US oil firm Unocal, and Royal Dutch Shell suggests it is ready to take to the warpath again. But aren’t these companies crazy to buy oil assets given that crude is trading near a record high of $60 a barrel? If oil prices fell, so would valuations. In many ways, they don’t have a choice. High demand means that many companies are now pumping their reserves quicker than they can replace them...