Mexico to slash oil output

Reuters ^ | January 1, 2002

[sarcasm]

Mexico City — Applauding OPEC's decision to cut oil output, Mexico reaffirmed on Tuesday it would join the effort to bolster lackluster world prices by reducing its own exports by 100,000 barrels per day in the first half of 2002.

The oil-rich nation, which is not a member of OPEC but a key player because it ranks among the top three oil suppliers to the United States, said its cut would take effect starting Tuesday in concert with Organization of Petroleum Exporting Countries' tightening of supplies by 1.5 million b/d.

Mexico agreed in November to rein in its exports if other non-OPEC powerhouses joined the effort to reverse sinking oil prices, which slid by 30 per cent after the Sept. 11 attacks in the United States further weakened a stagnant world economy.

The energy ministry said in a statement it was confident the OPEC and non-OPEC supply cuts "will achieve a healthy balance between supply and demand, which will allow a halt in the fall of prices and assure the necessary investments to maintain a sure and reliable supply of oil."

It had not been clear, however, where the cut would put Mexico's export levels. The energy ministry said the new export cap would be 1.66 million b/d — cut from what Mexico had forecast in its 2002 budget but roughly in line with November's average exports.

Mexico shipped an average 1.682 million b/d of crude in November, bringing the average for the first 11 months of 2001 to 1.713 million b/d.

Mexico's cut and pledges from Norway, Russia, Oman and Angola tallied the independent producers' contribution to 462,500 b/d. OPEC had pressured the non-OPEC producers to chip in with 500,000 b/d in reductions in order for the cartel to go ahead with its own 1.5 million b/d cut.

It was not immediately clear on Tuesday if Mexican oil monopoly Petroleos Mexicanos (Pemex) would be forced to declare a force majeure on some contracts to meet its commitment.

The oil price plunge has forced Mexico into a tough fiscal spot. Because the government relies on oil for more than a third of its income, lower oil prices can force painful budget cuts — a chief reason why Mexico joined in the OPEC effort to raise rock-bottom prices in the late 1990s.

At the same time, Mexico's economy is closely tied to the economy of the United States, where higher energy costs could frustrate an economic recovery expected to take root in mid-2002.

The U.S. recession has already sapped Mexico's economy, which sends 85 per cent of its exports to the United States. Mexico's gross domestic product is forecast to contract 0.26 per cent in 2001, a sharp reverse from 2000's red-hot growth of 6.9 per cent.

[EggsAckley]

Has Mexico become just another desert gas station, where the residents sit around on their barrels of oil waiting for the next sucker to come along? That abundance of oil is exactly why the middle east contributes nothing to the world BUT oil. Why should they? They've got OIL! So now Mexico is going to become the next useless oil country?

Oh, yeah; that'll be okay because first they'll sent all their unwanted, untrainable citizens to California.

[Semper Paratus]

Hola Mexico, time to revisit that agreement on the condition of your interborder trucks?

[Straight Vermonter]

I have said before on these boards that we should negotiate a guaranteed minimum price for oil with the Mexicans, Venezuelans and anyone else with oil in our part of the world. The caveat is the run full bore all the time and we get what they produce. While this rubs some people the wrong way, as it smacks of socialism, building huge stockpiles of oil in the US has the advantage of lessening the pressure the Arabs can apply to us or our allies. Consequently reducing the number of Americans who have to go in harms way to secure a constatnt flow of oil.

Guaranteeing energy to our economy and our military is only step one in a sensible energy policy but we seem to never even that far no matter which party is in power.

[House of Stone]

Most of them are already here, look out the window.

[Nachum]

Well, we have about 11 million illegals here. Most of them are from Mexico.

Tell you what, pump the gas or well send you a few million of your countrymen back to help increase your production...

[monkeyshine]

Mr. Putin, courtesy call on the Red Phone. Mr. Putin, courtesy call on the Red Phone.

[cincinnati_Steve]

How in hell can Mexico screw over us, their across-the-border allies? (winkwinknudgenudge) Dubya needs to tell Fox that he will not, indeed, cut production, but make up any shortage that OPEC institutes. It's time for Mexico to reciprocate our goodwill with some quid pro quo. Screw 'em all. I'm sick of knuckling under to these guys.

[Rowdee]

..."Mexico reaffirmed on Tuesday it would join the effort to bolster lackluster world prices by reducing its own exports by 100,000 barrels per day in the first half of 2002".....

This actually should read, "Mexico reaffirmed on Tuesday it would join the effort to bolster lackluster world prices by reducing its own exports by 100,000 barrels per day in the first half of 2002.in an effort to force Los Estatos Unidos to come to the table to establish the implementation date of the "General Amnesty Proposal", as written by Mexico. Said implementation date, of course, will be dependent upon how many more Mexican citizens can make it across the Los Estatos Unidos southern border to establish their illegal alien immigration status".

[OldFriend]

Time to think ECONOMICS.......if the price is too low it becomes unproductive for domestic drilling......too much oil, means too low a price. By limiting production it gets the price up.........

[Dubya]

And Texas.

[MinuteGal]

You got it right, Nachum! Let's make a deal. For every barrel they cut back, we deport one illegal. This way, everybody is happy.

Leni

[EggsAckley]

You're right, Rowdee. This isn't about "bolstering world prices;" this is a selfish attempt at extorting the USA so we will allow them to send us all of their "trash." Mexico has a variety of racial backgrounds, and the ones who come to California (and Texas?) are the Mestizo Indians, many of whom are totally illiterate in their OWN language, not to mention ours. They are unwanted in Mexico, and Mr. Fox is more than happy to send them to us.

True, some of them come here and excel, but most of them remain untrained, uneducated, unemployed, depending on welfare, and creating generation after generation of children who think that their "job" is signing up for welfare.

[Mike Darancette]

I am happy to see that the Mexican Economy is in such good shape that they can forego 2,000,000/day of revenue. We could help them achieve ever greater independence by cutting any aid that we might be giving them by a like amount. We could also send back some of their citizens that are in this country so that they might share in Mexico's good fortune.

[Brownie74]

Screw 'em all. I'm sick of knuckling under to these guys.

Methinks co-President Fox just pooped on President Bush. I agree that it's time for Mexico to reciprocate but it won't happen. And Bush has the audacity to call these people our amigos.

[SCalGal]

Time to drill for our own, and quit importing.... Mexico obviously doesn't need to export any more oil.

[F.J. Mitchell]

With Mexico for a friend, the USA doesn't need any enemies. Half their population has invaded the USA and are sending half our gross national income home to their oil rich country. The same country that is aiding and abetting OPEC in the destruction of our economy.

Round up every Mexican national and send them home to live off their countries extorted gain from helping jack up the price of oil. We can only afford to look after our own citizens-let Mexico look after it's own.

[sarcasm]

Time to take Mexico before a NAFTA tribunal?

[hoot2]

"Mexico reaffirmed on Tuesday it would join the effort to bolster lackluster world prices by reducing its own exports by 100,000 barrels per day"

at the same time they've placed n ad, "experienced roust-abouts wanted......pronto!!!"

[alloysteel]

I guess they just can't stand prosperity. They have an easily available product, a ready market for it, and relatively low transportation costs. That would SEEM to be every advantage necessary to provide a commanding position in international trade. One's own foot, though, may just be too tempting a target.