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Mexico central bank flags 2025 growth uncertainty

  • : Crude oil, Oil products
  • 24/12/02

Mexico's central bank (Banxico) maintained its base-case 2025 GDP growth estimate at 1.2pc, with a range of 0.4pc to 2pc, citing heightened global uncertainty fueled by geopolitical conflicts and potential shifts in international economic policies.

Central bank governor Victoria Rodriguez last week addressed US president-elect Donald Trump's proposed 25pc tariffs on Mexican goods, urging caution until the trade situation clarifies.

Mexican president Claudia Shienbaum initially responded with a firm stance, saying Mexico could apply counter-tariffs. Later, Sheinbaum and Trump had a "friendly" phone call to discuss issues surrounding the proposed 25pc tariff on Mexican and Canadian imports, Sheinbaum said.

Banxico raised its 2024 GDP growth forecast to 1.8pc from 1.5pc in its previous quarterly report in August, driven by stronger-than-expected third-quarter performance. Still, Banxico noted that the additional growth is driven by increased spending on imported goods rather than domestic production, particularly in investment and private consumption.

Inflation dynamics remain mixed. While headline inflation rose to an annualized 4.76pc in October, core inflation eased to 3.58pc, its lowest level since mid-2020. Rodriguez emphasized progress on inflation despite external uncertainties, signaling room for further monetary easing.

Banxico cut its target interest rate by 25 basis points to 10.25pc on 14 November and is widely expected to lower it again to 10pc at its 19 December meeting. Projections from Mexican finance executives institution (IMEF) suggest the rate could drop to 8.25pc by the end of 2025.

Banxico also revised its 2024 inflation forecast to 4.7pc from 4.4pc in the August report but expects inflation to return to its 2–4pc target range by early 2025, with a 3pc rate projected by the fourth quarter.

Other adjustments include a downgraded forecast for formal job creation in 2024 and 2025, with the range estimate for full-year job creation in 2024 dropping to 250,000–350,000 from 410,000-550,000 in August. The 2025 estimate came down to 340,000–540,000 from 430,000–630,000.The 2025 trade deficit outlook was also tightened to $14.9bn–$22.1bn, compared to a previous range of $13.7bn–$23.7bn.


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European products markets open higher on US tariffs


25/02/03
25/02/03

European products markets open higher on US tariffs

London, 3 February (Argus) — European light and middle distillate markets opened higher today after US tariffs against China, Mexico and Canada were announced over the weekend, but market participants reacted cautiously to the move. US president Donald Trump on 1 February slapped tariffs of 10pc on Canadian energy imports, which account for a significant share of foreign crude and products supply into the US. The tariff rate against Canada stood in contrast to the 25pc tariff applied to Mexico, which may be designed to mitigate the inflationary effect of costlier Canadian crude and products imports in the US market. Eurobob non-oxy gasoline barges were trading at a volume-weighted average of $728/t at 13:40 GMT, up from $715/t since the 31 January close, while underlying Ice February gasoil futures — the futures value against which diesel and jet cargoes are traded — was higher at $727/t, up from $711.25/t. Brent crude values were just 14¢/bl higher, as product cracks firmed by 19.1pc and 8.6pc to $10.37/bl and $20.43/bl against Brent futures for non-oxy barges and Ice gasoil futures, respectively. Any Canadian product sales into the US would see tariffs passed onto the buyer, according to one source with knowledge of the matter, adding they were waiting to see how Canada otherwise responds to the US tariffs. Canadian refiners could also start sending their product to west Africa or Latin America, another source close to the matter told Argus last week. This ‘wait-and-see' approach was echoed by one Mideast Gulf gasoline trader, while two European analysts said the desired policy outcome of rebalancing trade between the US and Canada was not straightforward, and may make Canadian products imports more affordable as the Canadian dollar depreciates. The US may be better prepared for a gasoline supply shock as a result of seasonal stockpiling, one analyst said, but the US Atlantic Coast has a more significant gasoline supply shortage than Canada if gasoline output were to remain in the domestic market north of the border, another said. In a sign of concerns over US Atlantic Coast diesel tightness, the Sebarok Spirit LR2 appeared to have been booked to deliver a mixed cargo of 10ppm diesel and gasoline from the Port of Antwerp to New York by 15 February, according to Kpler tracking data. These type of voyages "never happen", one analyst said, with Europe structurally short of diesel and the ARA hub a reliable diesel buyer of last resort. The vessel was still anchored at the Port of Antwerp today. In the event of lower Canadian crude deliveries to US refineries, US product cracks could strengthen, one analyst said, but added a halt in supplies of Western Canadian Select (WCS) to US refineries was unlikely. A strengthening in product cracks could exacerbate a seasonal improvement in Rbob gasoline premiums ahead of the summer driving season, the source said, while transatlantic diesel arbitrage economics could remain shut firmly for longer — closing off a key supplier from the European diesel market. It was not immediately clear how product flows from Canada to the US were otherwise impacted today, as most product exports into the US are made via pipeline. No new gasoline or diesel cargoes were recorded loading at Canadian ports signalling US delivery by Kpler today. Two vessels carrying clean products from Valero's 265,000 b/d Jean Gaulin refinery, Quebec, were sitting offshore northeast US signalling to discharge volume at New Haven, Connecticut on 5-6 February. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US delays Mexico tariffs by a month


25/02/03
25/02/03

US delays Mexico tariffs by a month

Mexico City, 3 February (Argus) — The US has agreed to postpone the implementation of 25pc tariffs on Mexican goods for one month, "allowing Mexico time to demonstrate good results for the US people and our people" on key security concerns, President Claudia Sheinbaum said today. Under the agreement Mexico will immediately reinforce its border with the US with 10,000 national guard troops to prevent drug trafficking into the US, with a specific focus on fentanyl, Sheinbaum posted on social media platform X following a conversation with President Donald Trump. The US pledged to take stronger action to curb the flow of high-powered firearms into Mexico, she said. US president Donald Trump confirmed the tariff delay in a social media post, saying there would be negotiations in the coming weeks with Mexican officials and US secretary of state Marco Rubio, secretary of the treasury Scott Bessent and secretary of commerce Howard Lutnick. The tariffs were originally set to take effect on 4 February. By Antonio Gozain Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Opec+ JMMC sees no need to expedite return of output


25/02/03
25/02/03

Opec+ JMMC sees no need to expedite return of output

Dubai, 3 February (Argus) — A key panel of Opec+ ministers today effectively gave its backing to the group's output policy, which would not see any production returned to market until at least April. It has not, for now at least, heeded US President Donald Trump's call for the producer group to "bring down the cost of oil," something it could only do by raising output. Opec+ members are scheduled to start unwinding 2.2mn b/d of voluntary crude production cuts starting in April over an 18-month period — a decision taken in December. At the time the Opec secretariat said this was "to support market stability," an implicit nod to the uncertain demand picture and projections of a looming supply surplus in 2025. There appears little chance of this being expedited by Trump's call, which he made within days of taking office in January. The ministerial panel today made no mention of a change to policy. The JMMC statement following the meeting once again put a large emphasis on the importance of member conformity with production targets. It stressed the need for members that have exceeded their targets to fully deliver on their pledges to compensate for past overproduction. The JMMC's remit is limited to making recommendations on policy, with actual policy decisions made at full meetings of the Opec+ group. One important outcome of the panel today relates to the composition of the Opec+ secondary sources, which provide monthly estimates on member production levels. Consultancy Rystad Energy and the US' Energy Information Administration (EIA) were replaced by data analytics firms Kpler, OilX and ESAI, effective 1 February. The other secondary sources are Argus , consultancy Wood Mackenzie, S&P Global Platts, IHS Markit and Energy Intelligence. The next JMMC meeting is scheduled for 5 April. By Nader Itayim and Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

LatAm output rise poses quandaries for exporters


25/02/03
25/02/03

LatAm output rise poses quandaries for exporters

Sao Paulo, 3 February (Argus) — Crude supply from Latin America is set to rise this year, raising questions about where the extra flows will go, given the multiple uncertainties that the markets are facing around tariffs, sanctions and maritime security. The big drivers of this additional supply will be Brazil, Guyana and Argentina, which are together expected to deliver an extra 400,000 b/d of mainly light and medium sweet crudes to world markets this year, according to the latest IEA projections. Brazil is expected to produce 220,000 b/d more crude this year as several new floating production storage and offloading vessels come on line. These include two at the Buzios complex that will add 405,000 b/d of capacity, and another at the Mero field adding 180,000 b/d — both fields produce middle distillate-rich medium sweet grades popular with buyers in Europe. Guyana, the most eye-catching oil development story of the past decade, produced just over 615,000 b/d last year, and output will increase again this year as the 250,000 b/d Yellowtail project ramps up. In Argentina, the oil sector is expected to benefit from the expansion of storage and loading facilities at the key port of Puerto Rosales, which will allow the docking of heavier Suezmax tankers and create scope for increased exports of light sweet Medanito from the Vaca Muerta shale formation. The big question for these producers is how and where they can market these exports, given the myriad uncertainties being caused by geopolitics. Tighter US sanctions on Russian exports are lifting premiums for non-sanctioned crude, boosting interest in recent weeks for Brazilian and Guyanese grades. But the White House's threatened trade tariffs on Canada and Mexico could also leave US refiners seeking replacements, while diverting Canadian and Mexican shipments elsewhere. Lower risks to shipping in the Red Sea could boost Mideast Gulf flows to Europe, increasing competition there, but this could open up sales opportunities in Asia-Pacific, as could tighter US sanctions restricting Iranian oil sales to China. The upshot of all this is that some of these Latin American grades are likely to find increased interest from existing and some new customers. Brazil, Guyana and Argentinian sweet crudes do not offer a like-for-like substitute for mainly heavy sour Mexican and Canadian grades — Colombia or Ecuador could provide a closer match. But they could hold some appeal as a short-haul option for US refiners needing to rethink their crude buying — Guyana and Argentina, for example, already export some oil to the US west coast. Going for Unity Gold There could also be interest from new markets in Asia and west Africa — India's BPCL bought its first cargo of Medanito in December, while Nigeria's huge new Dangote refinery could be another outlet. The refinery is likely to face competition for domestic Nigerian grades from the country's newly renovated Port Harcourt and Warri refineries, and this month closed a tender that included Brazilian and Guyanese options for the first time. Brazil and Guyana have already established robust exports to Europe — the region took two-thirds of Guyana's shipments last year — while Brazil is a big supplier to India and especially China. Guyana could also come into play as another "non-sanctioned" option for Chinese and Indian buyers scaling back Russian crude purchases because of US sanctions. China has not imported any Guyanese crude for several years, shiptracking data indicate, but India is starting to show interest, as indicated by state-owned IOC's tender earlier this month, which listed Guyana's Payara Gold, Unity Gold and Liza among the eligible grades. By Joao Scheller Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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