LatinNews Regional Monitor: Mexico - 21 April 2020

* Mexico’s state-owned oil company Pemex has announced that the average price for the company’s crude exports has fallen to an historic low of -US$2.37 per barrel, meaning the firm would have to pay buyers to offload its crude. This is down from its closing price of US$14.35 per barrel on 17 April. A negative oil price has never been seen before. According to statistics from Mexico’s central bank (Banxico), the lowest price previously recorded was US$7.04 per barrel on 11 December 1998. This comes as US oil prices also entered negative territory yesterday (20 April) for the first time, amid the lack of demand caused by the coronavirus (Covid-19) pandemic. The reference price of West Texas Intermediate (WTI) crude closed at -US$37.63/barrel. Also yesterday, Moody’s de México, a local subsidiary of international credit ratings agency Moody’s Investor Service, confirmed its downgrade of Pemex’s ratings to 'A2.mx/Ba2' from 'Aa3.mx/Baa3', maintaining a 'negative' outlook. According to a press release the decision to lower Pemex’s ratings was “triggered by the company's higher liquidity and business risk” and by Moody’s announcement that it had downgraded the government of Mexico’s ratings.

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