Mexican mix has a weekly rise of 11.29%

The price of the Mexican export mix had its biggest weekly rise since March 25, a month after Russia’s invasion of Ukraine in late February.

Last week, Mexican crude gained 11.29% or 8.71 dollars, trading at a price of 85.87 dollars a barrel. At the end of March, it gained 12.89 percent.

Only on Friday it had an increase in its price of 4.29% or 3.53 dollars, according to data from Petróleos Mexicanos. So far in 2022, it earns 20.45 percent.

Oil posted its biggest weekly rise since the start of the Russia-Ukraine war after OPEC+ agreed to the biggest production cut since 2020, sending prices to highs not seen since late August.

The US benchmark West Texas Intermediate (WTI) rallied 16.54% or 13.15 dollars in the week, closing at 92.64 dollars per barrel. This is the biggest weekly rise since the first week of March, when it rose more than 20% after the Russian invasion of Ukraine on February 24.

North Sea Brent crude was up $12.81, or 15.05%, for the week at $97.92 a barrel.

Only on Friday, the WTI rose 4.74% or 4.19 dollars and the Brent advanced 3.71% or 3.50 dollars.

On Wednesday, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced that it was going to apply a production cut of 2 million barrels per day from November, in order to stop the falls in crude oil prices. It is the biggest cut to production since March 2020.

“The announced cut will generate a lower supply of raw material, which is why prices rose,” said Carlos González, Director of Analysis at Monex Casa de Bolsa.

In previous weeks, crude had been pushed down by fears that demand would fall sharply in a global recession scenario, leading prices to hit nine-month lows in late September.

“The magnitude of the cut had already been discounted in previous days. The news is that apparently OPEC is going to be aware that even if demand drops, prices remain high”, said the Monex analyst.

Norbert Rücker, Head of Economics and Research of Next Generation, at Julius Baer, ​​explained in a note that the cut in production by OPEC + was a “geopolitical” decision and with a “weak” fundamental reasoning, since the market of oil is far from having a “surplus” or excessive supply.

The momentum of OPEC+’s cut in oil prices seemed to have come to an end on Friday, as futures headed into the red as markets opened in Asia on Sunday.

WTI for November delivery was down 0.30% at $92.36 a barrel as of 7:30 p.m. Central Mexico time on Sunday, and Brent for December delivery was down 0.80% at $97.66 a barrel.

Ana Azuara, Raw Materials analyst at Banco Base, said that towards the end of 2022, the price of crude oil will move depending on the intensity of the winter season in the West.

He explained that if the winter is very cold and causes a significant increase in the demand for energy, the WTI would end the year at 95 dollars per barrel; if not, it would conclude below 90 dollars.

So far in 2022, WTI has gained 23.18% and Brent 25.89 percent.

“We still believe that oil prices will decline next year, possibly at a slower pace. The main consequence of the quota reduction seems to be to increase uncertainty”, stated Norbert Rücker.

Gasoline in the US on the rise

Reformulated gasoline futures in the United States had a weekly rise of 15.39%, closing on Friday at 2.73 dollars per gallon, the highest price of energy since the end of August.

Last week’s was the biggest rise in energy since the week the war broke out in Ukraine, when it rose 16.85 percent.

It is the second consecutive week in which the price of gasoline in the United States rises, since previously it had already won due to problems in refineries in that country that limited supply.

During 2022, gasoline futures are up 32.01%; at the end of 2021 they were trading at 2.0787 dollars per gallon.

The rise in energy prices during the week caused a rise in the shares of companies in the sector on the stock market.

The S&P 500 Energy index – which brings together the largest energy companies in the United States – soared 13.86% last week, trading at 629.14 dollars. It is its biggest weekly rise so far this year.

The 21 companies that make up the sector gained 196.058 million dollars in market capitalization during the week that just ended.

Apache Corp. (an oil and gas producer) was the biggest gainer within the index, as its shares rose 24.36% to $42.52 a share. It increased its market value by 2,720 million dollars.

Oil companies Chevron and Exxon Mobil – the largest in the United States – earned 32,024 and 57,180 million dollars, respectively, in market value. Chevron shares rose 11.39%, while Exxon Mobil shares advanced 15.71%.

For the year, the S&P 500 Energy is up 48.82 percent. Of the 11 sectors of the S&P 500, Energy is the only one that manages to post green numbers so far in 2022, in a year in which the main stock index accumulates a decline of 23.64 percent.