Nacho Catten and Javier Blas, Bloomberg, have a nice piece on Mexico’s oil hedge here…
”Mexico will cash in its oil price insurance policy this year for the fourth time only in the last two decades, receiving a payout of about $2.5 billion from its 2020 sovereign oil hedge, people familiar with the transaction said…
Mexico told lawmakers earlier this year it had guaranteed its budget oil price assumption of $49 a barrel for 2020 through a mix of its oil hedge and the use of a budget revenue stabilization fund. Traditionally, the stabilization fund covers a couple of dollars of the price, with the rest hedged via a massive derivatives deal with several Wall Street banks. Assuming that Mexico hedged around $45-$47 a barrel, and that it secured a similar volume as in previous years, it stands to receive a payout in excess of $2 billion….
Although Mexico disclosed details of its hedge in the past, since 2018 it has kept secret the most sensitive data, including the exact strike price of the put options, and the volume hedged. On top of its sovereign program, which is run by the country’s Ministry of Finance and executed by the central bank, the state-owned oil company Petroleos Mexicanos also runs a much smaller oil hedge.“
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