• HISTORY: Mexico’s state-owned oil company, Pemex, reported Monday that its oil export basket fell to US 10.37 per barrel reaching a 20-year low as crude benchmarks around the world plunged to its cheapest levels in years amid fears that the global coronavirus outbreak could last longer.
• RESOURCES: Falling 20.3% from Friday’s US 13.01 per barrel, the historical low price of Pemex oil export basket could represent trouble for the Mexican government’s 2021 budget as it relies on it. In the short run, Mexico’s finance are covered through hedges and other measures.
• WARNING: “The collapse in oil prices…despite the existing oil hedges, should place further stress on fiscal accounts and call into question the (Mexican) government’s Pemex-centered growth strategy”, Gustavo Rangel, chief Latin American economist at ING, wrote in a note last Friday.
• FURTHER: With the International Energy Agency (IEA) reporting a 20 million barrels per day fall in global oil demand, the Mexican crude export basket could see further strain from the conflict between Saudi Arabia and Russia. Pemex said yesterday it would work with basic staff during the next days.
