Comments from Lopez-Obrador:
- We argued that it’s very hard to cut output
- Mexico has struggled to increase its production
- Mexico will contribute to stabilize prices
- Mexico agreed to cut 100K bpd
- Says US will cut additional 250K bpd
- Mexico has already informed oil producers of agreement
OPEC demanded Mexico cut 400K bpd but Lopez Obrador seems to indicate that OPEC+ has relented, perhaps because the US has pledged to cut.
It’s not clear how the US is going to mandate some kind of a cut or if the US will argue that market-driven shut-ins are the same thing. Previously, there has been talk about curtailments in Texas and some kind of COVID-19 health mandate to close some gulf production.
Mexico has one of the stronger hands here because they have hedge all 2020 production.