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Business

Mexico Hopes that Oil Prices will Rise in 2017

Hydrocarbon undersecretary Lourdes Melgar said that he expects oil prices to rise to between $40 and $60 per barrel in the next few years

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By Notimex Whatsapp Twitter Facebook Share
2 years ago

In 2017, oil prices will rise to between 40 and 60 dollars per barrel, according to the undersecretary of hydrocarbons of Mexico’s Energy Secretariat, Lourdes Melgar.

“We’ll see a slow rise in prices, to between 40 and 60 dollars per barrel next year. We don’t expect a huge rise to $100 a barrel, at least not in the next few years,” said Melgar in a forum about the Mexican energy market to the Council on Foreign Relations in Washington, D.C.

The price of Mexican crude oil has been affected by an adverse international situation, characterized by a growth in global supply of hydrocarbons, both from OPEC countries and from Russia and the United States.

Also, the demand for crude oil has declined, due to a general slowing-down in the world economy in 2016, and a deceleration of growth in China, whose expansion had supported growth in countries dependent on exporting raw materials.

Melgar said that Mexican crude will not fall below $20 per barrel, a price that it reached early this year, and explained that Petróleos Mexicanos (Pemex) expects Mexican crude to average $25 per barrel in 2016.

He explained that the low oil prices have led Pemex to postpone auctions of projects to extract heavy crude. He noted one oil field with proven heavy crude reserves that could not be auctioned because extraction would require oil prices of $45 per barrel to break even.

We’ll see a slow rise in prices, to between 40 and 60 dollars per barrel next year. We don’t expect a huge rise to $100 a barrel, at least not in the next few years

On Thursday, the price of Mexican crude rose to $32.04 per barrel, a 4.02 percent rise from the previous day and the highest it has been in 2016. Shrinking American fuel inventories, as well as a 1.7 percent decline of the dollar in relation to a basket of 6 currencies, contributed to the price increase.

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