London, December 2019
Mexico has changed its two-decades-old pricing formula for exports of flagship crude Maya to reflect changing oil market fundamentals. From this month, state-owned oil company Pemex will price exports to the US using a formula that includes 65pc Argus WTI Houston and 35pc Ice Brent.
This is the latest adoption of Argus WTI Houston as a formal benchmark element, following its use in contracts for US crude sales to Asia.
Most of Mexico’s crude exports go to the US — around 60pc in October, compared with a fifth to Europe and about 20pc to Asia and the rest of the world.
Since restrictions on exporting US crude were lifted in December 2015, the country’s soaring light sweet crude production, driven by the shale oil sector, has increasingly been finding its way to the seaborne markets. Houston has developed as the US’ largest crude export hub. Argus WTI Houston has developed as a key regional and international benchmark supported by active futures contracts on the CME and Ice exchanges that settle against the Argus price, enabling companies to hedge risk.
Adrian Binks, chairman and chief executive of Argus Media said: “It is logical for Pemex to change its formula to reflect the key, most liquid benchmark in the US Gulf coast. The Argus WTI Houston price is rapidly becoming an important international price marker that reflects real market conditions.”
About Argus Media
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Companies in 140 countries around the world use Argus data to index physical trade and as benchmarks in financial derivative markets as well as for analysis and planning purposes.
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