07/22 Closing prices/ revised 07/23/2024 07:50 GMT  |                                                                          07/22 OPEC Basket  $82.77   -$2.04 cents 07/22 Mexico Basket (MME)  $73.72   -$0.37 cents  | 06/31 Venezuela Basket (Merey)   $69 23   -$1.22 cents| 07/22 NYMEX WTI  August CLQ24  $79.78  -$0.35 cents | 07/22 ICE Brent Sept  BRNU24  $82.30 -$0.23 cents  | 07/22 NYMEX Gasoline Aug RBQ24 $2.47 +0.8 %  |  07/22 NYMEX  Heating Oil  Aug  RBQ 24  $2.43  +0.7% | 07/22 Natural Gas August NGQ 24    $2.25   +5.8%  | 07/19 Active U.S. Rig Count (Oil & Gas)    586  +2   | 07/23 USD/MXN Mexican Peso 17.9848 (data live)  | 07/23 EUR/USD   1.0877 (data live)  | 07/23 US/Bs. (Bolivar)   $36.5314000 (data BCV) |

Mexico Executes Secretive Hedge for Next Year’s Oil Exports – Bloomberg

Mexico Is Locking In Prices for 2024 Crude Exports  (Investment U)
Mexico Is Locking In Prices for 2024 Crude Exports (Investment U)

Devika Krishna Kumar and Alex Longley, Bloomberg News

MEXICO CITY
EnergiesNet.com 10 18 2023

Mexico has been conducting its annual oil-export hedging program, one of the crude market’s largest such undertakings, according to people with knowledge of the transactions.

The hedging process — in which Mexico buys put options that allow it to sell crude at a pre-determined price — is likely close to completion or already over, according to the people, including those involved in the deals in the past. The Latin American country has been targeting price levels of about $80 a barrel, two of the people said. 

The program has become increasingly guarded in recent years as the country tries to block the market from front-running the trades, and the nation has even branded the hedge a state secret. The players involved in the deal have also changed, with banks seeing a smaller slice of the business compared to oil majors, traders said. 

The finance ministry didn’t immediately respond to requests for comment.

The so-called Hacienda hedge has historically been among the largest in the oil market, valued at about $1 billion. However, Mexico has sought to cut down its exports as part of a strategy by the nationalist government of Andres Manuel Lopez Obrador to reach self-sufficiency in the domestic fuels market.  

Signs of the hedging process first appeared in August, when a monthslong decline in volatility suddenly stopped, according to data compiled by Bloomberg. Volatility has since steadily ticked higher, though that move has also been fueled by a period of oil-market turbulence that has seen prices quickly bounce between roughly $85 and $100 a barrel. 

Last year, Mexico locked in an oil-hedge program for 2023 that protected the country’s revenue if prices for its crude decline below $68.70 per barrel, Deputy Finance Minister Gabriel Yorio said at the time. 

–With assistance from Max de Haldevang.

bloomberg.com 10 17 2023

Share this news

Support EnergiesNet.com

By Elio Ohep · Launched in 1999 under Petroleumworld.com

Information & News on Latin America’s Energy, Oil, Gas, Renewables, Climate, Technology, Politics and Social issues

Contact : editor@petroleuworld.com


CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved
 

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

 
 
Scroll to Top