Mexico cuts oil price in face of glut, low demand
Mexico has again cut the price of its top quality oil - this time by $2.50, to $32.50 a barrel - and slashed its heavy crude price to $25.00 a barrel effective March 1.
Monitor Latin America correspondent James Nelson Goodsell writes that the world oil glut, low oil demand, and price slashing by other nations are behind the decision by Petroleos Mexicanos (PEMEX), Mexico's state run oil enterprise.
Ironically, the new price structure is below that set last June - a move that forced the resignation of PEMEX's former director general. His price reductions did not set well with the Mexican government, which warned Mexico would not knuckle under to pressure to slash prices.
The new head of PEMEX, Julio Rodolfo Moctezuma Cid, quickly restored half his predecessor's price cuts, but since then has cut prices lower than they were in June. Mr. Moctezume Cid says Mexican oil production will continue at the rate of between 2.5 and 2.7 million barrels per day.