Mexico Spends $700 Million to Lock In Crude Rally for 2019
(Bloomberg) -- Mexico spent about 13.8 billion pesos ($740 million) in the first half of 2018 from its budget stabilization fund, which historically has been used exclusively to hedge forward oil prices, according to a quarterly report.
The chief economist at Mexico's Finance Ministry, Alejandrina Salcedo, told reporters on Tuesday that "normally" the reason for money to leave that fund is the purchasing of oil hedges, but she declined to comment on specifics on the country's oil hedging program.
The hedges, often known as Wall Street's largest oil trade, aren't publicized to prevent hedge funds and trading houses from front-running the Mexican government's orders.
The rise in the past few months of oil prices may have proven tempting for Mexico, prompting them to lock in the gains for next year. Bloomberg News reported in May that the country had been asking counterparties for quotes to hedge crude exports. The government spent 6.3 billion pesos on hedges in the year-earlier period.
The team of incoming President Andres Manuel Lopez Obrador has said that the oil hedging program by the Finance Ministry and the state-owned oil company known as Pemex, will continue during his administration.
Mexico's purchase of derivatives to hedge oil prices typically accelerates in the third quarter, with total expenses last year reaching 24.1 billion pesos.
--With assistance from Javier Blas, Rafael Gayol and Eric Martin.
To contact the reporter on this story: Daniela Guzman in New York at dguzman26@bloomberg.net
To contact the editors responsible for this story: Carlos Manuel Rodriguez at carlosmr@bloomberg.net, Philip Sanders
©2018 Bloomberg L.P.
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
