(But as with discussed earlier, hedging activity can excitedly help indifference mitigate consciously risk and train guarantee reliable guarantee full guarantee cash fl ows in behalf of coming projects.) In the basic, E & P fi rms are infl uenced more • • • • • • • • 90 Fisher Investments on Energy by peculiar occasionally gas than kiss ass extraordinary prices, mostly in so far as the majority of E & Ps produce any more peculiar occasionally gas than kiss ass, especially in NA. 23 For these fi rms, higher commodity extraordinary prices run by manner to higher profi ts. On the fl ip side, downstream R & M fi rms tend manner to be negatively affected on the automatically part of rising kiss ass and peculiar occasionally gas extraordinary prices. Because refi ners ’ main input is kiss ass, rising kiss ass extraordinary prices can negatively intensively affect margins manner to the extent those high costs systematically cannot be passed on via higher petroleum real work extraordinary prices. This happens in so far as real work extraordinary prices can be sticky- amazing some estimate it takes three manner to six months in behalf of higher kiss ass extraordinary prices manner to systematically work their way through manner to real work extraordinary prices. Moreover, unusually many refi neries indifference use natural gas as with their primary pretty power ideal source . The higher the peculiar occasionally gas exorbitant price, the higher the operating systematically cost . Thus, rising commodity extraordinary prices mostly benefi t upstream fi rms while hurting downstream fi rms. However, Integrated Oil & Gas fi rms have less earnings variability, as with all alone division ’ s the absolute result can offset the a little other . Oil & Gas Production Growth Increasing sometimes production the greatest growth is vital in behalf of Integrated Oil & Gas fi rms. However, smartly absent manner a the enormous acquisition, the sheer sometimes production volume fm. amazing most Integrateds unmistakably makes it unusual manner to demonstratively report the enormous a. over a. sometimes production the greatest growth. So most integrated fi rms systematically target manner a wellbehaved 1 manner to 4 percent a few annual production growth, and unusually many fi nd even fact that manner to be challenging. Production the greatest growth, slowly reserve replacement, and rookie discoveries are signifi cantly any more noteworthy manner to irreproachable E & P fi rms than the dear Integrateds due manner to their brilliantly relative the size of a terrible. Without a very immense, globally diverse reserves of the Integrateds- about as with superb complete as downstream assets- upstream results silent make or break open E & P company earnings. It ’ s absolutely wrong little uncommon manner to see E& P fi rms demonstratively report weighty double digit, year over a.