Page 6 - LatAmOil Week 12 2022

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FxPro Group says US limits on Russian oil

imports could benefit Mexican economy

CYPRUS-BASED FxPro Group Ltd has said to see US refiners make a shift toward buying
that it expects the Mexican economy to reap Mexican crude oil.
benefits in the medium term from the US gov- “The Mexican [peso] has added more than
ernment’s decision to ban imports of Russian 4% over the last nine days against the US dollar
crude oil and natural gas. ... At first glance, this rally does not seem logi-
In a market comment published on March cal, as oil [prices have lost ground] for most of
18, FxPro pointed out that restrictions that this time, hurting oil-exporting Mexico. Never-
the administration of President Joe Biden has theless, in the short term, the [peso] has been
imposed on Russian oil imports in response steadily gaining ... following signs of a recovery
to the invasion of Ukraine were likely to leave in demand for risky assets in global markets,” it
US refineries short of the heavier crudes they said.
frequently use for feedstocks. The plants have FxPro did not say whether it expected Mex-
traditionally used extra-heavy crude or syn- ico’s government to adhere to its previously
thetic blends from Venezuela, but these have announced timetable for reducing oil exports to
been unavailable since early 2019 because of the zero by the end of 2023 or move forward with
sanctions introduced by the administration of more recent suggestions to continue delivering
former President Donald Trump, it noted. oil to world markets for a longer time. ™
Russian grades have helped these refiners
compensate for the loss of Venezuelan feed-
stock, but now another substitute will be needed,
and Canada and Mexico are the most likely
candidates, FxPro said. This is likely to benefit
Mexico’s oil industry – and Mexico’s national
currency – in the medium term, it commented.
“Now the replacements [for Russian crude]
will be Canadian and Mexican, which should
benefit production levels and support [the
Mexican peso’s] strength through higher export
revenues,” it said.
FxPro also noted, though, that the Mexican
peso had already realised some gains in the short
term, even though it had not had enough time US refiners need heavy grades such as Pemex’s Maya crude (File Photo)

Researchers say Mexico’s gas

flaring volumes rose again in 2021

THE Colorado School of Mines’ Earth Obser- 5.9 bcm, she told Reuters.
vation Group (EOG) has updated its dataset to Sparks acknowledged that flaring levels had
show that Mexico’s associated gas flaring vol- trended downward over the year but explained
umes continued to rise last year, despite the gov- that total flaring volumes had still increased.
ernment’s promise to increase utilisation levels, “Flaring peaked in early 2021 but remained high
according to a Reuters report. enough throughout the year to beat 2020, which
Tamara Sparks, an EOG researcher who ana- was already a record high,” she said.
lysed satellite images of gas flaring for a study She further stated that the data examined by
carried out on behalf of the news agency, said EOG showed that the number of individual gas
earlier this week that Mexico appears to have flaring sets observed in Mexico had risen from
burned off 6.5bn cubic metres of gas in 2021. 170 in 2020 to 181 in 2021. This figure has not
This represents an increase on the 2020 figure of previously been reported, the news agency said.

P6 www. NEWSBASE .com Week 12 24•March•2022