Qatar joins Mexico with oil hedge - FT.com

Qatar, a member of the Opec oil cartel, has joined Mexico in taking out an insurance policy against falling oil prices next year, hedging some of its oil for 2012 as both nations adopt a cautious view about the global economy.

Mexico hedges oil prices every year, but bankers said that Qatar has taken out insurance only rarely over the last two decades. The programme by Mexico is the world’s largest single hedge in commodities markets by value and one of only a few implemented by a sovereign entity, rather than a company.

The hedge by Qatar comes after Middle East countries have raised public spending sharply to quell public discontent on the back of the Arab Spring. Economists say that Gulf nations would need much higher oil prices to balance their budgets.

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