Mexico spent more than $1 billion to fix export prices for oil next year and thus help protect the state budget.
The authorities through the annual hedging program designed to protect against volatility in the market and the fall in oil prices recorded in the price of oil at $42 per barrel for 2017. This level is lower this year — $49 and $76.4 in 2015 as era of low oil prices lasts for the third consecutive year, informs “News of Economy”.
Mexico’s economy is facing recently some problems regarding the uncertainty of interest rate in the United States and the outcome of the presidential elections in this country.
As noted by the senior analyst “Alpari” Anna Bodrova, “the problem with the swings in oil prices, each manufacturer decides on its own”. “Mexico once again went on the modern ways and hedged by falling prices for “black gold”. Insurance cost the state 19 billion pesos (more than $1 billion). Such risks will not assume any one insurance company, so you buy insurance Mexico made 46 deals in the global insurance market”, — said in the review expert.
In her words, “in the insurance contract recorded the average annual price of oil at $42 a barrel, and anything below this level will be covered from the sum insured”. “Insurance in 2016 for Mexico in General has justified itself: in the insurance contract the price per barrel was recorded at $49, and insurance premiums may be according to various estimates up to $3 billion Is quite substantial sums when the price of insurance is three times lower,” — emphasizes Bodrov.
In her view, “the very idea of insurance against falling prices are quite reasonable, but few of the countries-oil producers chooses this path, believing that one-time expenses look pretty scale”.
Mexico uses the practice of hedging the fall in oil prices since 1990. At the moment, the country is one of the world’s biggest producers of oil with production of about 2.2 million barrels per day.
