oil up or down ??



http://www.livemint.com/Opinion/dNuIBvZ5ZtYn3VSw5DQdmI/What-Vladimir-Putin-sees-in-Donald-Trump.html

While the oil market is the largest determinant of Russia’s near-term economic prospects, accounting as it does for half of export revenues, long-term growth requires Russia to re-enter international capital markets, attract foreign investment (and stem capital flight) and reintegrate with the global economy. All of this requires a global economy that is stable and predictable. A Trump presidency would mean the opposite.

Trump’s fiscal plans, which involve massive tax cuts without credible reduction in spending, could cause US interest rates to spike, fuelling turmoil in financial markets. His casual suggestions that US debt might be renegotiated could trigger dramatic losses in the value of Russia’s foreign-currency reserves, which have been its anchor in the economic storm that has hit the country since 2014. His threats to launch a trade war against “unfair” foreign competition seems likely to draw in Russia’s steel exports. And his unpredictability on key security and geopolitical issues could increase external risks.
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August 30 2016

Mexico 2017 oil exports hedged at $US42 a barrel

http://www.theage.com.au/business/e...-hedged-at-us42-a-barrel-20160829-gr44ha.html

Mexico's government hedged oil exports for next year at an average $US42 a barrel, locking in protection against low crude prices.

The government spent $US1.03 billion on put options that give it the right to sell 250 million barrels at $US38 per barrel, with an additional $US982 million from its budget stabilisation fund to guarantee $US42 a barrel, the Finance Ministry said Monday in a statement.


The 2017 hedge comes as Mexico stands to take in about $US3 billion from this year's hedge price of $US49 per barrel. Photo: Bloomberg

The 2017 hedge comes as Mexico stands to take in about $US3 billion from this year's hedge price of $US49 per barrel, which was put on from June to August 2015, if prices remain around current levels. That follows last year's record payout of $US6.4 billion after locking in crude sales at $US76.40 in 2015.

Mexico has spent an average of almost $US1 billion a year over the past decade buying put options through deals with banks that have included Goldman Sachs, Citigroup, JPMorgan Chase & Co, Morgan Stanley, BNP Paribas, Barclays and HSBC Holdings, according to government documents.

The put options were acquired between May 13 and August 25, during which the average price of West Texas Intermediate crude was $US46.52. Seven counterparties participated in the deal, according to the statement.

Despite Mexico's hedging success - it received $US5 billion in 2009 after oil prices plunged - few other commodity-rich countries have followed suit. Ecuador hedged oil sales in 1993, but losses triggered a political storm and the nation never tried again. More recently, oil importers Morocco, Jamaica and Uruguay have bought protection against rising energy prices.
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