Prices Keep Edging UpwardsBy Peter Appleby | Fri, 05/22/2020 - 10:05
This week brought more good news than bad for Mexico’s oil and gas industry. Prices of the world’s major benchmarks continued ticking upwards while no great problems presented themselves. Read the best of this week’s news, here.
The positive trading that the start of the week enjoyed is obviously good for the industry and a great relief after negative pricing seen some weeks ago. China, for example, is seeing oil demand of close to pre-virus levels but overall, world economies are still operating far below their usual levels. The industry had to remain cautious.
The billion-dollar hedging strategy that Mexico has employed to protect its oil revenue over the past 19 years has shown to be a spectacularly good piece of business. A per barrel hedging price of US$49 looks set to deliver several billion dollars back to the country. Mexico isn’t the only country using this tool, but will a host of other countries now considering doing the same?
PEMEX has been accused of being unable and unwilling of protecting its offshore workers by PETROMEX, an oil workers union. It certainly isn’t alone, with companies in far flung fields appearing unable to stop the spread on work sites. How will the oil and gas industry improve standards for the future?
Reports of better-than-expected industrial production in Europe and a “record draw” from the Cushings oil hub in Oklahoma have led oil prices higher again. OPEC+ and non-OPEC cuts have also helped shrink the oil glut that was causing storage problems globally. Onwards and upwards at the moment.