Mexico’s government hedged oil exports for this year at an average $49 a barrel, locking in protection against low crude prices, the nation’s Finance Ministry said.
A statement from the ministry on Friday announcing the completion of the hedge, for the same oil price as estimated in the 2020 budget, didn’t disclose how much Mexico paid to acquire the coverage, a break from recent years, including the announcement of the program for 2019 a year ago.
Banks writing put options for Mexico—contracts that give it the right to sell oil at a predetermined future price—hedge themselves in the market by selling crude and refined products futures and swaps.
Mexico earned billions of dollars from the hedge in 2015 and 2016 after crude oil plunged, locking in above-market prices.