As crude reaches negative prices (Even if it might last for a very limited time), I’m starting to remember Mexico’s annual oil hedge. Ever since 2008 we’ve made around ten billion dollars on our hedging operations. However, the details of the deal are a well-guarded secret and no one really knows how many barrels we hedged or at what price we did. The estimate is that we hedged 220 million barrels at 45 dollars per barrel and we used Brent as a reference, which would mean... If I understand this correctly, that banks who hedged with us are currently losing 27 dollars on every barrel we make, minus of course the premiums we paid for the insurance. producing 1.6 million a day, that’s a loss of 43 million dollars... just today.
Yet, if I recall correctly, Mexico had to make another undisclosed deal with the Trump administration so that the US would cut 300,000 barrels of production per day on our behalf for the OPEC+ deal. When we did our 2008 hedge the gross payout came from Barclays and Goldman Sachs... so I’m willing to bet the big Wall Street banks are still the ones selling us the insurance.
Maybe the deal with the Trump administration has a connection to those banks, and perhaps we’re gonna be part of the bailout. This is just a conspiracy I imagined after seeing the WTI hit -40... I have no information to back it, and I hope it’s false.