Mexican oil loses all its value

 Pemex reported the Mexican oil mix at -2.37 dollars, after charging 14.35 units per barrel last Friday.

MEXICO (Agencies) – Mexican oil lost all of its value yesterday and, like U.S. oil, is trading in negative numbers for the first time in history.

Pemex announced that it sold the Mexican oil mix at -2.37 dollars, after charging 14.35 units for each barrel placed last Friday.

Oil storage tanks have run out of space due to the scarcity of demand generated by “the great confinement” of COVID-19, so operators have had to get rid of the oil through contracts with negative numbers, in other words, paying market participants to accept the fuel.

With the current negative price, the Mexican hydrocarbon accumulates an unprecedented fall of $61.72 concerning its maximum amount reached in the year of $59.35 on January 6.

During 2020, the average price per barrel is $35.9, 13.1 less compared to the 49 that the federal government guaranteed for the 2020 budget.

Mexican oil is sinking hand in hand with U.S. crude, known as WTI, whose price ended Monday at -37.63 dollars, although it reached -40.32 units, according to information from Bloomberg agency.

The price refers to future contracts in May which expire tomorrow, but due to the lack of space to store oil at the present time, the holders of these papers have had to pay to get rid of them.

Meanwhile, futures contracts in June closed today at $20.43, which means that WTI prices may recover tomorrow or fall again, depending on market expectations.

The collapse of the petrol-prices indicates that traders believe the historic agreement between the Organization of Petroleum Exporting Countries (OPEC), Russia, Mexico, and other nations to cut crude oil production from May was insufficient.

In its World Economic Outlook (WEO) report in April, the International Monetary Fund (IMF) estimated that the world economy would shrink 3% during 2020 due to the Great Confinement, being the worst recession in the last 90 years. This situation will complicate an eventual recovery in oil demand.