US, WASHINGTON (ORDO NEWS) — The price of Mexican oil exports rose from $ 10 to $ 20 per barrel in two days after statements by U.S. President Donald Trump about productive negotiations with Riyadh and Moscow regarding a decrease in production volumes, as well as the OPEC + virtual conference scheduled for Monday to balance the market.
The figure reflecting the average price level for various regions and supply formulas was published on the website of the Mexican Petroleum Corporation Pemex on Friday night.
According to market players, the first positive signal on Thursday was the news of China‘s purchase of oil for strategic reserves, after which a trump tweet about negotiations with the Crown Prince of Saudi Arabia gave prices a powerful boost.
Saudi Arabia later called on the OPEC + participants to come together for an emergency meeting on April 6 with other countries to balance the oil market.
The fall in oil prices, which in the case of the Mexican oil mixture fell more than 5 times in March from January to $ 57 to $ 10, threatens Mexico’s budget revenues , which are largely dependent on black gold exports. The national oil corporation Pemex, which has a serious debt burden and is already faced with a downgrade, was hit.
According to Pemex, at the end of 2019, the average cost of oil production in the company rose to $ 14.2 per barrel, although in some fields it is $ 4.8. Fitch Rating Agency estimates the average cost of oil production at Pemex at $ 25 per barrel.
The OPEC + March 6 countries were unable to agree either to change the parameters of the transaction to reduce oil production, or to extend it. As a result, from April 1, restrictions on oil production in the member countries of the former alliance were lifted. This caused a collapse in the oil market, which overlapped with a sharp global drop in demand due to the coronavirus pandemic.
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