NGI Mexico GPI

Mexico’s President Andrés Manuel López Obrador was cheered in recent days by the news of the Quesqui discovery in his home state of Tabasco, described by state oil company Petróleos Mexicanos (Pemex) as “gigantic” and the company’s largest since 1987.

In the wake of a major sell-off to start the week, natural gas futures gained back some of those losses Tuesday as the latest weather data returned demand to the outlook. The January Nymex contract added 3.2 cents to settle at $2.264/MMBtu, while February settled at $2.263, up 2.9 cents.

Mexican company Fermaca announced Tuesday that its 453-kilometer (281-mile), 1.3 Bcf/d La Laguna-Aguascalientes pipeline has entered into commercial operation.

Natural gas futures gapped lower Monday after weekend forecasts erased December cold from the outlook, further pressuring a market needing robust winter demand to bring it closer to balance. After opening more than a dime below Friday’s settle price, the January Nymex contract went on to settle at $2.232/MMBtu, down 10.2 cents. The February contract settled at $2.234, off 8.5 cents.

Mexico’s Environment Minister, Víctor Toledo, is the latest government official to voice support for President Andrés Manuel López Obrador’s plans to prohibit hydraulic fracturing, or fracking, through at least 2024.

Weather models finally converge; mild outlooks sends Nymex natural gas lower

Editor’s Note: This is one in a series of pieces NGI is undertaking as the energy industry readies for the new year. With Lower 48 natural gas and oil supply continuing to surge in an uncertain environment as liquefied natural gas exports ramp up, Mexico markets remain shrouded and stakeholders demand more value.

The winners of oil and gas contracts under Mexico’s 2013-2014 energy reform are fulfilling their commitments, and are on track to reach production of 50,000 b/d of oil and 240 MMcf/d of natural gas by year’s end, according to a new report from the Asociación Mexicana de Empresas de Hidrocarburos (Amexhi) trade group.

Editor’s Note: NGI’s Mexico Gas Price Index, a leader tracking Mexico natural gas market reform, is offering the following column as part of a regular series on understanding this process, written by Eduardo Prud’homme.