This is perhaps the most difficult situation that a producer may be faced with. On the one hand, it is hard to spend money “protecting a loss.” On the other, the risk still remains and there is no guarantee that the unrealized loss will not become larger. Strategies can be developed to limit further deterioration in margins, but unless the outlook improves, the producer will likely realize a loss. It may however be true that while spot margins are poor, opportunities exist in deferred periods where margins are good. This is where the producer should focus; periods where they can take action to protect projected favorable margins.