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Page added on January 13, 2019

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Mexico Confirms It Completed 2019 Oil Hedge at $55 a Barrel

Business

Mexico’s Finance Ministry confirmed that it spent about $1.23 billion to protect 2019 revenues against falling crude prices in the world’s largest annual oil deal.

The oil producer locked in hedges at $55 a barrel, equivalent to the price approved by lawmakers for the 2019 budget, according to a Finance Ministry statement. The total expense comes to about 23.5 billion pesos.

Mexico has in recent years spent around $1 billion on average buying financial put options from Wall Street banks, a closely-watched set of trades that typically covers 200 million to 300 million barrels and has the potential to roil markets. The trade, also known as the Hacienda hedge, is considered the largest oil deal on Wall Street.

Banks writing put options for Mexico — contracts that give it the right to sell oil at a predetermined future price — hedge themselves in the market by selling crude and refined products futures and swaps.

On Thursday, Brent oil prices for December 2019 settled up 14 cents at $62.29 a barrel as oil extended its winning streak to the longest in almost a decade. This comes after near-term prices briefly dipped below $50 a barrel last last year.

Mexico earned billions of dollars from the hedge in 2015 and 2016 after crude oil plunged, locking in above-market prices.

Last year the government took steps to conceal further details about the annual oil hedges, telling its national audit body releasing more information “could increase the cost of the oil hedge.”

The Mexican oil hedge runs from the beginning of December until the end of November.

bloomberg



21 Comments on "Mexico Confirms It Completed 2019 Oil Hedge at $55 a Barrel"

  1. twocats on Sun, 13th Jan 2019 3:49 pm 

    So yet again, oil prices will be anchored around $55/barrel – ala 2016 price RISE.

    Can most shale wells make a profit at that price? No. Will it matter to credit lines? Someday it might, hard to tell (unless you have evidence for the conspiracy that money will be fed to shale no matter how much it loses).

    But OPEC is cutting again and Shale is wobbling a bit – $55 isn’t enough for either group.

    2019 will most likely be very interesting.

  2. Free Speech Forum on Tue, 15th Jan 2019 4:08 am 

    The US has gone completely batshit insane.

    Americans used to fight Nazis and Commies, but have now become Nazis and Commies.

    Americans are simply unable to see hypocrisy or understand unintended consequences.

    Americans say Obama was an asshole for destroying the US with wars, debt, and tyranny, but then they turn around and scream Trump is a holy god for supporting wars, debt, and the police state.

    Americans think the government can magically rule by decree.

    Americans say tyranny only affects others and that they are immune from the police state.

    Americans insist freedom only benefits other people.

    Americans want the government to ban saggy pants and smoking, but then they are puzzled why prisons are overcrowded.

    Americans demand that the government start a trade war, but then they are stunned when prices rise and no one wants US exports.

    Americans say tiny homes must be illegal, but then they baffled why homelessness and housing costs increase.

    Americans beg for welfare and then they are shocked that the US debt is growing.

    Americans want the government to have regulations and high minimum wages, but then they are dumbfounded why there are no jobs.

    Americans want the government to start endless wars, but then Americans do not understand why the world hates the USA and why there are refugees, terrorism, and tyranny.

    Anyone who loves wars, debt, and tyranny is considered to be normal and anyone who supports peace, balanced budgets, and freedom is called a nutjob and racist and is banned, gets an IRS audit, gets arrested, or is killed.

    The entire country seems to be committing suicide.

    WTF?

  3. JuanP on Wed, 16th Jan 2019 7:42 am 

    I am back, bitches! I just got back from a surfing vacation in Costa Rica. I am recharged and refreshed, and ready to continue fucking with the Exceptionalist for the foreseeable future. Your move, Davy! LOL!

  4. JuanP on Wed, 16th Jan 2019 7:44 am 

    I agree, Free. The USA is destroying itself and Americans are their worst enemies. Just look at all the American assholes on this forum! Sad, but true.

  5. Hello on Wed, 16th Jan 2019 8:00 am 

    >>> The entire country seems to be committing suicide.

    Yes, you can only so long import 3rd world before you become 3rd world yourself.

  6. JuanP on Wed, 16th Jan 2019 8:50 am 

    No, Hello, you can only be delusional for so long, sooner or later you have to start paying the consequences. But feel free to blame others for your problems if it helps you feel better. Your time would be better spent building a better life for yourself. I just got back from a surfing vacation in Costa Rica with my wife; we both love surfing. I blame noone but myself for that! LOL!

  7. Davy on Wed, 16th Jan 2019 8:53 am 

    “I just got back from a surfing vacation in Costa Rica with my wife; we both love surfing. I blame noone but myself for that! LOL!”

    That is par for the course for a stupid asshole South American playboy. Lets go surfing fuck the world is your moto, creep.

    BTW stupid, Hello is Swiss.

  8. Davy on Wed, 16th Jan 2019 8:56 am 

    It is amazing how dirty and messed up this board gets when JuanP is on. If this site could ban anyone and make a huge difference it would be Dirty JuanPee. This would be in regards to intellectual content and forum decorum.

  9. JuanP on Wed, 16th Jan 2019 9:07 am 

    Delusional Davy “That is par for the course for a stupid asshole South American playboy. Lets go surfing fuck the world is your moto, creep.”
    I am a stupid asshole South American playboy and I love it! ROFLMFAO! It is people like you and your country who are fucking the world, not people like me and my country, Exceptionalist! And it is YOUR children’s problem, not mine!

  10. JuanP on Wed, 16th Jan 2019 9:11 am 

    Davy, it really pisses you off that you are completely impotent to ban me from this forum or deport me, doesn’t it? I am a law abiding one percenter; people like me don’t get banned or deported fool; we can go wherever we want and do whatever we want. That is what life is all about; the rich fuck and the poor get fucked. I am rich! Get it, moron?

  11. Davy on Wed, 16th Jan 2019 9:19 am 

    No I am not pissed you are. You and you anti-American gang has failed at censoring me. I win idiot and this is the reason you play dirty. You don’t have a brain in your playboy head or you would debate the issues. What an idiot, surfing in Costa Rica as the world falls apart. Scumbag

  12. Antius on Wed, 16th Jan 2019 9:50 am 

    Davy, you keep feeding the troll and frequently impersonate him. The words ‘pot’, ‘kettle’, ‘black’, come to mind. If you want him to go away, then stop throwing him bones.

  13. Davy on Wed, 16th Jan 2019 10:03 am 

    Antius, if this was only occasional I would agree with you. This situation is out of control so I dish out what they give me. I never said I was not a black kettle did I? These idiots start it 100% of the time. If dirty Juanpee is gone how much dirty shit happens? Right, zero. Anonymouse is a loon too but at least he is here only once a day

  14. Davy on Wed, 16th Jan 2019 11:10 am 

    I wish I knew how to surf. It looks real hard. I’m so sick and tired of shovelling goat shit 24/7.

    I want my mommy but she thinks I’m a miserable asshole just like everybody else does. I’m on the verge of a mental breakdown.

    BOO HOO!

  15. JuanP on Wed, 16th Jan 2019 11:24 am 

    I can’t surf I am just acting like I can. I am really a miserable lonely scumbag with a dysfunctional personality. My wife doesn’t even like me. She remains because daddy send a monthly check.

  16. Davy on Wed, 16th Jan 2019 11:28 am 

    None of the rules apply to me.

    I AM THE EXCEPTIONALTURD! HEAR ME RORE!

  17. Davy on Wed, 16th Jan 2019 11:32 am 

    Oops, sorry. ROAR!

    stupid spell chekker

  18. JuanP on Wed, 16th Jan 2019 3:00 pm 

    ROFLMFAO! I just got back from the farm where I harvested 87 lbs. of peppers and tomatoes, my biggest harvest so far this year. I see that the Exceptionalist is still at it; some things never change! LOL!

  19. JuanP on Wed, 16th Jan 2019 3:17 pm 

    I am a liar. I was at the beach putting oil on Boney joes shoulders. I am a lazy playboy scumbag.

  20. Davy on Wed, 16th Jan 2019 3:19 pm 

    Juan, we could give a shit what you do. Are you capable of an intelligent comment? Bragging on your dumbass just makes you look even more foolish.

  21. The United States of America on Wed, 16th Jan 2019 3:27 pm 

    We thank you for all of your volunteer work, and for your service to our country JuanP. You are truly a great man.

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