The Secret Weapon Giving Mexico Power in the Oil Price War - Bloomberg:
As Mexico and Saudi Arabia fight over a deal to bring the oil-price war to an end, Mexico has a powerful defense: a massive Wall Street hedge shielding it from low prices.
With talks well into their third day, the Mexican sovereign oil hedge, which insures the Latin American country against low prices and is considered a state secret, is a factor that may make the country less inclined to accept the OPEC+ agreement.
For the last two decades, Mexico has bought so-called Asian style put options from a small group of investment banks and oil companies, in what’s considered Wall Street’s largest -- and most closely guarded -- annual oil deal.
The options give Mexico the right to sell its oil at a predetermined price. They are the equivalent of an insurance policy: the country banks all gains from higher prices but enjoys the security of a minimum floor. So if oil prices remain weak or plunge even further, Mexico will still book higher prices.
Saturday, 11 April 2020
#Saudi Aramco to release May crude official prices on Sunday - source - Reuters
Saudi Aramco to release May crude official prices on Sunday - source - Reuters:
Saudi Arabia plans to announce its crude prices for May on Sunday, a source told Reuters, having delayed the official release until after it finalizes a global oil supply cut deal.
Saudi Arabia plans to announce its crude prices for May on Sunday, a source told Reuters, having delayed the official release until after it finalizes a global oil supply cut deal.
#UAE says OPEC+ output cut decision will have a major impact - Reuters
UAE says OPEC+ output cut decision will have a major impact - Reuters:
United Arab Emirates’ energy minister Suhail Al Mazrouei said on Saturday that an OPEC+ decision to cut oil supply will have a major impact on rebalancing the oil market amid the coronavirus outbreak.
“The group’s decision to cut supply will be the largest ever cut in the history which will help balancing the oil supply and demand,” Al Mazrouei said on Twitter.
The minister thanked Saudi Arabia, which had called for the meeting, during which OPEC led by Saudi Arabia and its allies led by Russia, which together make up the informal OPEC+ group, forged a pact to curb crude production by 10 million barrels per day (bpd) or 10% of global supply in marathon talks on Thursday.
United Arab Emirates’ energy minister Suhail Al Mazrouei said on Saturday that an OPEC+ decision to cut oil supply will have a major impact on rebalancing the oil market amid the coronavirus outbreak.
“The group’s decision to cut supply will be the largest ever cut in the history which will help balancing the oil supply and demand,” Al Mazrouei said on Twitter.
The minister thanked Saudi Arabia, which had called for the meeting, during which OPEC led by Saudi Arabia and its allies led by Russia, which together make up the informal OPEC+ group, forged a pact to curb crude production by 10 million barrels per day (bpd) or 10% of global supply in marathon talks on Thursday.
U.S. senators hold call with #Saudi officials urging them to put oil cut in motion - Reuters
U.S. senators hold call with Saudi officials urging them to put oil cut in motion - Reuters:
Republican U.S. senators from oil states who recently introduced legislation to remove American troops from Saudi Arabia said on Saturday they had spoken with three officials from the kingdom and urged them to take concrete action to cut crude output.
Saudi Arabia and Russia were close to finalizing a deal with other producers in the informal OPEC+ group to cut crude output by a record 10 million barrels per day (bpd), or about 10% of global output.
Oil prices had fallen to 18-year lows as the coronavirus outbreak closed down economies across the world and after Saudi Arabia and Russia had boosted output in a race for market share.
The call was led by Senators Dan Sullivan and Kevin Cramer, members of the Senate Armed Services Committee, who introduced legislation in March to remove U.S. troops, Patriot missiles and THAAD defense systems from Saudi Arabia unless it cut output.
Republican U.S. senators from oil states who recently introduced legislation to remove American troops from Saudi Arabia said on Saturday they had spoken with three officials from the kingdom and urged them to take concrete action to cut crude output.
Saudi Arabia and Russia were close to finalizing a deal with other producers in the informal OPEC+ group to cut crude output by a record 10 million barrels per day (bpd), or about 10% of global output.
Oil prices had fallen to 18-year lows as the coronavirus outbreak closed down economies across the world and after Saudi Arabia and Russia had boosted output in a race for market share.
The call was led by Senators Dan Sullivan and Kevin Cramer, members of the Senate Armed Services Committee, who introduced legislation in March to remove U.S. troops, Patriot missiles and THAAD defense systems from Saudi Arabia unless it cut output.
#Saudi Aramco Oil Pricing Latest News on OPEC+ Talks - Bloomberg
Saudi Aramco Oil Pricing Latest News on OPEC+ Talks - Bloomberg:
Saudi Arabia is pushing back a key decision on pricing for its crude exports as the kingdom seeks to commit global producers to a massive coordinated supply cut.
State producer Saudi Aramco is set to decide on and announce pricing for May crude exports on Sunday, according to people with knowledge of the situation. The official selling prices, or OSPs, were meant to be released April 5 before twice being delayed to allow producers time to discuss output cuts amid demand destruction due to the coronavirus.
Aramco didn’t immediately comment on the delay.
Talks among global producers aimed at securing curbs of 10 million barrels a day are entering their third day Saturday. Saudi Arabia convened OPEC+ members Thursday, hosted a conference call of G-20 energy ministers Friday and is set to speak with U.S. and Mexican officials Saturday. The meetings that stretched overnight failed to overcome Mexican resistance to the proposed reductions.
Saudi Arabia is pushing back a key decision on pricing for its crude exports as the kingdom seeks to commit global producers to a massive coordinated supply cut.
State producer Saudi Aramco is set to decide on and announce pricing for May crude exports on Sunday, according to people with knowledge of the situation. The official selling prices, or OSPs, were meant to be released April 5 before twice being delayed to allow producers time to discuss output cuts amid demand destruction due to the coronavirus.
Aramco didn’t immediately comment on the delay.
Talks among global producers aimed at securing curbs of 10 million barrels a day are entering their third day Saturday. Saudi Arabia convened OPEC+ members Thursday, hosted a conference call of G-20 energy ministers Friday and is set to speak with U.S. and Mexican officials Saturday. The meetings that stretched overnight failed to overcome Mexican resistance to the proposed reductions.
OPEC Meeting News: The Surprise Holdout to a Global Deal - Bloomberg
OPEC Meeting News: The Surprise Holdout to a Global Deal - Bloomberg:
One of the most dramatic global oil production agreements in history has been left hanging on the approval of an unlikely character: Mexican President Andres Manuel Lopez Obrador.
For weeks Russia and Saudi Arabia, two energy powerhouses, have been sparring over oil, with their dispute sending crude prices tumbling. That drew in U.S. President Donald Trump, with a strong interest in seeing prices stabilize and in supporting America’s shale industry as he campaigns for reelection in November.
And yet when Moscow and Riyadh finally seemed to have found common ground on production cuts, at a meeting on Thursday of OPEC+ nations that followed a flurry of diplomatic activity and high-level calls, it was Mexico that called time.
Lopez Obrador refused to sign off on the deal, even after the other 22 nations inked the pact to withdraw 10 million barrels a day from the market in a bid to tame a price plunge. From his office at the National Palace in Mexico City, the president known as AMLO was worried about only one thing: Pemex.
One of the most dramatic global oil production agreements in history has been left hanging on the approval of an unlikely character: Mexican President Andres Manuel Lopez Obrador.
For weeks Russia and Saudi Arabia, two energy powerhouses, have been sparring over oil, with their dispute sending crude prices tumbling. That drew in U.S. President Donald Trump, with a strong interest in seeing prices stabilize and in supporting America’s shale industry as he campaigns for reelection in November.
And yet when Moscow and Riyadh finally seemed to have found common ground on production cuts, at a meeting on Thursday of OPEC+ nations that followed a flurry of diplomatic activity and high-level calls, it was Mexico that called time.
Lopez Obrador refused to sign off on the deal, even after the other 22 nations inked the pact to withdraw 10 million barrels a day from the market in a bid to tame a price plunge. From his office at the National Palace in Mexico City, the president known as AMLO was worried about only one thing: Pemex.
#Saudi-Mexican clash halts record oil cut deal despite Trump pressure - Reuters
Saudi-Mexican clash halts record oil cut deal despite Trump pressure - Reuters:
Top oil nations struggled to finalise record output cuts at G20 talks on Friday to boost prices slammed by the coronavirus crisis, as Saudi Arabia clashed with Mexico despite U.S. President Donald Trump’s mediation offer.
OPEC led by Saudi Arabia and its allies led by Russia, which together make up the informal OPEC+ group, had forged a pact to curb crude production by 10 million barrels per day (bpd) or 10% of global supplies in marathon talks on Thursday.
Russia and OPEC said they wanted other producers including the United States and Canada to cut a further 5%.
But efforts to conclude the deal hit the buffers when Mexico said it would only cut output by a quarter of the amount demanded by OPEC+.
Top oil nations struggled to finalise record output cuts at G20 talks on Friday to boost prices slammed by the coronavirus crisis, as Saudi Arabia clashed with Mexico despite U.S. President Donald Trump’s mediation offer.
OPEC led by Saudi Arabia and its allies led by Russia, which together make up the informal OPEC+ group, had forged a pact to curb crude production by 10 million barrels per day (bpd) or 10% of global supplies in marathon talks on Thursday.
Russia and OPEC said they wanted other producers including the United States and Canada to cut a further 5%.
But efforts to conclude the deal hit the buffers when Mexico said it would only cut output by a quarter of the amount demanded by OPEC+.
#Saudi, Russia press on with oil cut deal at G20 talks, U.S. offers help - Reuters
Saudi, Russia press on with oil cut deal at G20 talks, U.S. offers help - Reuters:
Top oil nations pushed to finalise a deal on sweeping oil cuts at G20 talks on Friday to lift prices slammed by the coronavirus crisis with Russia and Saudi Arabia taking the lion’s share and the United States showing unusual willingness to help out.
Riyadh, Moscow and its allies, which make up the informal OPEC+ group, had forged a pact to curb crude production by the equivalent of 10% of global supplies in marathon talks on Thursday and said they wanted others to cut a further 5%.
But efforts to conclude the OPEC+ deal hit the buffers when Mexico insisted it would only cut its output by a quarter of the amount demanded by OPEC+, although Mexico’s president said Washington had offered to make extra cuts on his behalf.
President Donald Trump, who had threatened Saudi Arabia with oil tariffs if it didn’t fix the oversupply problem, said the United States would help Mexico by picking up “some of the slack”, although he said Washington expected to be reimbursed. He did not say how this would work.
Top oil nations pushed to finalise a deal on sweeping oil cuts at G20 talks on Friday to lift prices slammed by the coronavirus crisis with Russia and Saudi Arabia taking the lion’s share and the United States showing unusual willingness to help out.
Riyadh, Moscow and its allies, which make up the informal OPEC+ group, had forged a pact to curb crude production by the equivalent of 10% of global supplies in marathon talks on Thursday and said they wanted others to cut a further 5%.
But efforts to conclude the OPEC+ deal hit the buffers when Mexico insisted it would only cut its output by a quarter of the amount demanded by OPEC+, although Mexico’s president said Washington had offered to make extra cuts on his behalf.
President Donald Trump, who had threatened Saudi Arabia with oil tariffs if it didn’t fix the oversupply problem, said the United States would help Mexico by picking up “some of the slack”, although he said Washington expected to be reimbursed. He did not say how this would work.