As the latest inventory report comes back into focus, and as OPEC murmurs and rumors persist, oil prices are rallying once more – further aided by a pinch of dollar weakness. Hark, here are five things to consider in oil markets today.
1) In a surprising turn of events, Mexico has not been importing any U.S. crude oil, despite winning special dispensation last year to do so (prior to the lifting of the U.S. export ban). It was expected to send its heavier crude to the U.S., while in return bringing in higher-quality U.S. light crude.
It appears there is no room in Pemex’s slashed budget to import U.S. crude, given the budget has been cut by $8.7 billion in the last two years. There is also skepticism that the refineries are not in a good enough state to deal with the lighter crude – while infrastructure to move the crude is also lacking. The lifting of the U.S. oil export ban has also buoyed prices to be more in line with global benchmarks, an unfortunate development for Pemex.
Mexico’s six refineries are said to be running at