/
Weekly Roundups

Could Pemex Lose Money Per Barrel Produced?

By Cas Biekmann | Fri, 03/20/2020 - 17:38

Oil prices dropped further this week, although a small increase was observed toward the end of the week. Meanwhile, PEMEX will receive further capital injections of US$7 billion over the next two years.

Read about this and more in your weekly roundup!

 

Oil Prices Climb Up After Massive Drop

While last week was considered a shock, this week saw figures get even worse. Both the Mexican peso and oil prices were hit. For the week of March 15, oil prices ranged between US$14 and US$19 per barrel of Mexican mix. According to industry leaders, prices had not been this low in 18 years. This Thursday, prices climbed back up, with a 20 percent increase and by Friday the barrel of Mexican oil was at US$17.70. Experts call the drop a ‘perfect storm,’ due to tensions and broken agreements between OPEP and Russia, as well as the COVID-19 pandemic and creeping signs of recession. Prices below US$20 per barrel might very well persist.

PEMEX reported it would still be able to extract crude while making profits. However, analysts suggest that PEMEX is at risk of losing money on every barrel of oil it extracts, as PEMEX’s own figures do not take certain taxes into account.


Hedge Covers Oil Income, PEMEX to be boosted by billions

Last week, Minister of Finance Arturo Herrera explained that a US$1.4 billion hedge program covers Mexico in case of a drop in oil prices. The measure, albeit effective, does spell trouble as the government will need to spend more to boost its staggered economy.

This news was followed by an announcement that the government will inject a further US$7 billion into the NOC between 2020 and 2022. The injection is part of a financing plan from the government, aimed at helping PEMEX increase its falling production and lower its crippling debt status.

 

More Deceased at PEMEX Hospital

Last week’s roundup reported that tainted medicine killed seven at a PEMEX hospital. Now, the death toll has risen to nine. These deaths have been linked to a medical hazard due to the use of heparin sodium contaminated with bacteria. Patients receiving dialysis were affected and people that go through an open-heart surgery are especially at risk.

 

Crash in Oil Prices Seen at Gas Stations

Prices per liter of fuel at gas stations have dropped an average of MX$1 already. “Yes, [prices] have fallen, but not at the same rate at all gas stations because several factors come into play,” said ONEXPO President Roberto Díaz de León.

The data used in this article was sourced from:  
El Universal, El Economista, Expansion, Reuters, Mexico News Daily
Photo by:  
Gino Crescoli, Pixabay
Cas Biekmann Cas Biekmann Journalist and Industry Analyst