$1bn “insurance premium” against oil price dropping
Mexico has taken out a $1bn insurance policy against oil prices falling below $57 a barrel, the FT reports.
The world’s sixth largest oil producer has hedged all its net oil exports for 2010. Barclays Capital, Deutsche Bank, Goldman Sachs and Morgan Stanley arranged the hedge.
“We want this as an insurance policy,” said Agustín Carstens, Mexico’s finance minister. “If we don’t collect any resources from this transaction, it’s OK with us.”
Mexico hedged its oil exports at $70 this year. This paid out more than $5bn when oil prices dropped between January and June. That was more than 7% of Mexican government revenues this year.
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