The price of Mexico’s export oil mix has decreased by almost US$2.00 this week in response to speculative fears that the Omicron variant of COVID-19 will reduce hydrocarbon demand globally, reports La Jornada. Most of the decrease took place when CDC authorities announced that the variant had now appeared in US soil. The barrel reached US$61.23. This represents the lowest oil prices since August.
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OPEC+ Will Stick To Oil Production Increases Despite Omicron
OPEC+ announced it will not modify its previously accorded plan to continue increasing oil production in response to the spread of the Omicron variant. This plan calls for additional total oil output from OPEC+ countries to reach 400,000b/d by January. The prices of Brent and WTI crude continued their downward trend in response to this announcement, reports Al Jazeera.
PEMEX Creates New Subsidiary
PEMEX reported that its board approved the formation of a new subsidiary, which aims to sell petroleum products, gas and petrochemical products to the domestic market. “This proposal advances the structural changes that PEMEX's management has been implementing to strengthen the most important productive company in the country,” according to PEMEX. The company also explained it aims to obtain a larger share of the local market and that the creation of the subsidiary would not bring higher costs.
PEMEX Announces New CFO
Antonio Lopez Velarde was announced this week as PEMEX’s new CFO, replacing Alberto Velázquez who will be leading the newly announced subsidiary focused on downstream sales to the national market. Lopez Velarde used to be PEMEX’s Deputy Director of Financial Risk Management and Insurance. World Oil reports that Velázquez’s time as CFO had been controversial, citing an incident during an industry event in 2019 in which “four investors said he didn’t deliver a clear message and one of them called for his resignation.”
Deer Park Purchase Blocked By Pending US National Security Review
A US national security review is holding up Shell’s sale of the US-based Deer Park refinery to PEMEX. Shell had hoped to finalize the sale this Wednesday but lacks the required approval by the Committee on Foreign Investment in the US (CFIUS). “While we were hopeful we could conclude the sale of the Deer Park refinery earlier in the CFIUS review process, we are still targeting late 2021 as a closing date for the transfer of Shell's interest in the refinery,” said a Shell spokesperson; CFIUS declined to comment.