More on Mexico’s Oil Hedge… – Commodity Research Group

September 23, 2016 by Jim Colburn Leave a Comment

The most recent OPEC market report has a short piece on Mexico’s oil hedging program here (page 95): http://www.opec.org/opec_web/static_files_project/media/downloads/publications/MOMR%20September%202016.pdf

“Mexico’s hedging programme is the world’s largest single hedge in commodities markets by value. Mexico is also the only producing country to consistently hedge a substantial portion of its oil revenues. The objective of the programme is to reduce the impact of oil price changes on Federal Government revenues and public finances. The country’s Stabilization Fund is required by law to compensate if the average price levels for the mix of Mexico’s oil exports are below those set in the expenditure budget. The hedging programme serves the function of reducing the amount that needs to be compensated.”

Commodity Research Group (CRG), founded by veteran analyst Edward Meir, is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct commodity hedging strategies.

Our associates bring decades of experience to the table, as they seek to help our clients understand the markets. CRG will distill the myriad of pricing variables mentioned above into coherent research that is to-the-point and tailored to a clients hedging or pricing needs. In addition, CRG is available for consulting assignments and speaking engagements. CRG does not manage money or trade for itself.

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