NGI Mexico GPI

Editor’s Note: NGI’s Mexico Gas Price Index, a leader tracking Mexico natural gas market reform, is offering the following question-and-answer column as the first in a regular interview series with experts in the Mexican natural gas market.

Business leaders, analysts and politicians have joined a chorus of warnings that shortages of natural gas could strangle the ambitions of the Mexican administration to boost economic growth and create greater opportunities for the nation’s poor.

With government storage data offering few surprises and midday weather data sending mixed signals, a natural gas futures market that has seemed reluctant to make any sudden moves crept higher Thursday. In the spot market, prices continued to grind lower in the Midwest and East as the impact of this week’s cold pattern fades; the NGI Spot Gas National Avg. dropped 23.5 cents to $2.970/MMBtu.

The new director of Mexico’s Asociación Mexicana de Empresas de Hidrocarburos (AMEXHI), Merlin Cochran, sent a conciliatory message to the government on Tuesday by saying that both public and private sector companies were key to the success of the country’s energy sector.

No longer able to draw support from elevated cash prices, and with the shoulder season fast-approaching, natural gas futures retreated Wednesday. In the spot market, the prospect of rising temperatures saw prices fall across the eastern two thirds of the Lower 48, while heavy snow and rain accompanied gains in the West; the NGI Spot Gas National Avg. dropped 34.0 cents to $3.205/MMBtu.

Mexico’s central bank (Banxico) has downwardly revised its 2019 and 2020 economic growth forecasts for the country, citing both external factors and uncertainty over the government’s policies at home, as well as concern over the outlook for national oil company Petróleos Mexicanos (Pemex).

Chevron Corp. said Tuesday it plans to launch pilot programs this year on 162,000 net acres in the northern part of Argentina’s Vaca Muerta formation in Neuquén province.

A tighter storage picture — driven by a chilly start to the month — helped natural gas futures inch higher Tuesday. In the spot market, the prospect of warmer temperatures by the weekend saw prices throughout the Lower 48 reverse from recent gains; the NGI Spot Gas National Avg. slid $1.065 to $3.545/MMBtu.

Mexican national oil company Petróleos Mexicanos (Pemex) will need help from the private sector to keep oil and gas production afloat over the coming years, according to Comisión Nacional de Hidrocarburos (CNH) commissioner Sergio Pimentel.