Mexico’s Crude Exports Surge Even As Output Stalls

An earlier MT Newswires story incorrectly stated Mexico’s election is set for July 30. The story should have said the election is scheduled for July 1. The corrected version follows:

Mexico’s crude oil exports surged in February, state oil company Pemex said in its latest report, helping the country post its best trade balance in more than four years.

Crude exports in February were up 344,000 barrels per day (bpd) from the previous month at 1.45 million bpd, with the main Maya grade up nearly 300,000 bpd at 1.35 million bpd and lighter Istmo grade making up the balance.

Mexico’s crude oil exports so far this year have been running ahead of the average of the previous two years, even with overall production still in decline. Average crude exports in 2018 have been running at 1.27 million bpd, versus 1.17 million bpd last year and 1.19 million bpd in 2016.

Mexico’s overall crude output fell last month to 1.895 million bpd from 1.929 million bpd the month before and was down from last year’s average of 1.948 million bpd and 2.154 million bpd in 2016. The country was supposed to deliver 100,000 bpd of cuts as one of the 10 non-member countries signing up to join Opec’s output-restraint deal at the end of 2016, but it has involuntarily delivered more than twice that because of its fast-declining, aging oil reservoirs.

Still, the country has benefited from rising crude prices and February revenue was about $2.3 billion, up from just below $2 billion in January. It averaged about $1.67 billion a month last year and $1.3 billion the year before.

The 37 percent rise in year-on-year crude export value helped Mexico record a February trade surplus – before seasonal adjustment – of just over $1 billion, versus $759.2 million a year ago and the largest unadjusted trade surplus since 2013.

Crude exports to Europe surged last month to their highest level since September 2016, at 358,000 bpd, up 200,000 bpd on the month and compared with last year’s average 219,000 bpd. Crude oil exports to the US also surged, to 757,000 bpd from 603,000 bpd and last year’s average 638,000 bpd. They were down slightly to the Far East at 337,000 bpd but 30,000 bpd higher than last year’s average.

The higher exports and lower production are reconciled by Mexico’s sharply declining domestic refining throughput, down 40 per cent on the year at 644,000 bpd, which has required much higher importation of refined products, such as gasoline and diesel, mainly from the US.

Mexico holds elections in July and leftist Andres Manuel Lopez Obrador, a former Mexico City mayor who leads in the polls, has said he plans to divert crude that is being exported now to build back up the country’s refining sector capability.

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