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.

[hoot2]

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

using "illegal mexican prisoners", dig a canal between us n them; large enough for our aircraft carriers....
then drill the anwar....throw the u.n. out...n take the world off of our "welfare list"

n we lived happily ever after....amen

[Brownie74]

Time to take Mexico before a NAFTA tribunal?

Dream on!! The only thing this administration would take Mexico to would be a Taco eating contest.

[SCalGal]

And then we send Fox a bill for their room and board....

[facedown]

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.

It makes absolutely no sense for them to reduce their oil exports, ie. give up the revenue as pointed out by someone before me.

I would be willing to bet that they are just saying this and will "cheat" on the export numbers for the bucks.

[cincinnati_Steve]

We could help them achieve ever greater independence by cutting any aid that we might be giving them by a like amount.

Well, that's a good theory, but it's just that--a theory. Mexicans are like welfare recipients here in the good ol' US, once they're given something and they feel entitled to receive it, they kick and scream if you threaten to remove the freebies.

Thinking about all of this, I think we should impose a tariff on their goods equaling any increase in costs their illwill will affect. No joke, how in the hell can they align themselves with the buttonheads is beyond my comprehension (oops, sorry 'bout that epithet). They apparently need to be reminded of where their best interests lie.

You are -unfortunately- correct about GW not doing anything to remedy the slight, though. Seems like the Mexicans can do no wrong.

[lakey]

Games people play to stay in power and reap all the rewards.

I live for the day when "peons" all over the world wake up to the fact that the rich resources in and on their lands belong to THEM, and that their labors are a resource!

[MistrX]

Mexico. Our friend.

[michigander]

Russia's Capitalistic Oil Industry Is Pitted Against OPEC

[RWG]

So now what are they going to do about their hair?

[F.J. Mitchell]

We have 18 Million Mexican nationals living here? What is the population of Mexico, and does that include those living here?

[CIBvet]

Why is everyone so concerned with Mexico selling enough oil to the U.S. ??

I think we should be far more concerned that oil be in adequate supply to OUR old manufacturing facilities, now located deep in Communist China ... just to be certain our local WalMarts won't run out of that cheap junk to sell us.

Remember what our ol FAST-TRACK Buddy, Global-oney George keeps telling us, " Gotta keep $hopping, $hopping, $hopping ... $pending, $pending, $spending!" ... to build the economy back up, doncha know.