Oil Companies Hit it Big in the Mexican Stock MarketBy Antonio Trujillo | Wed, 08/25/2021 - 10:11
Oil companies trading in the Mexican stock market have reported a 94 percent income increase during 2Q21, compared to last year’s data.
Data retrieved from the Top 10 oil companies in Mexico listed on the stock exchange show an income´s increase totaling US$407,601 million, a sign of recovery from 2020, when that number totaled US$210,224 million.
US-based Chevron, has the biggest income increase totaling US$37,597 million, representing a 178 percent increase compared to June of last year, when it totaled US$13,494 million. In regards to value of shares in the market, Exxon-Mobil, ENI, and Repsol are considered best performing companies in the year.
Some of the reasons for this growth in income highlight rocketing oil prices in the wake of an ongoing economic reactivation in international markets thanks in part to the lessening of last year’s effects caused by the pandemic. In June 2020, Brent’s price stood at US$41.15 per barrel, West Texas Intermediate at US$39.27, and the Mexican mix at US$34.28. Those numbers have increased today reaching US$65.18 (a 58.4 percent increase), US$62.32 (a 58.7 percent increase), and US$59.16 (a 72.6 percent increase), respectively.
PEMEX’s lower performance when compared to its competitors was expected by analysts in large part to the company’s mounting debt. MBN has reported on the numbers that serve to illustrate the financial state of the company. For instance, by the end of last year, the NOC´s debt had risen to US$110.3 billion, and total sales had fallen to 32 percent year-on-year in 3Q20 due to a drastic 41 percent reduction in domestic sales and 18.6 percent in export sales. PEMEX attributed this situation to the effects of the pandemic and the general state of the economy. “The most important variables that explain this situation are the decrease in volumes sold due to the drop in economic activity as a consequence of COVID-19 and the drop in prices worldwide.”
Looking forward, oil companies will not be able to rely on crude forever to keep up the numbers. In an Expert Contributor piece for MBN, Alfredo García, Executive Managing Director of Siete Energy, commented that the imminent arrival of electric and hydrogen cars, coupled with increasingly popular green energies not limited to solar and wind only, will have its toll in the oil industry, where companies have already started to consider closing down refineries in expectation of lowered demand.