Wednesday, May 31, 2006

All posts were moved (11/2006) to

Black gold... Tampico Tea... OIL, that is...

There is a short report in today's Caracas El Universal (English edition) on the up-coming OPEC meeting:

Representatives of Angola, Mexico and Syria will act as observers in the 141st special meeting of the Organization of Petroleum Exporting Countries (OPEC). The event will take place next Thursday in Venezuela....

The OPEC meeting to be held in Caracas will deal with keeping, reduction or increase of the oil supply. Also, production and refining capabilities will be explored, as well as the use of currency in global oil dealings, Ramírez told reporters.

This comes the same day Business Week On-line reports:
Mexico's Treasury Department said Tuesday that the government had a budget surplus of US$3.3 billion (euro2.6 billion) in April, with revenue boosted by high oil prices and better tax collection. In a news release, the department said that budget revenues grew 9.8 percent from the year-ago month, with oil receipts up 5.6 percent from April 2005 and tax receipts up 18.1 percent.
The U.S. Department of Energy figures show Mexico as the #2 foreign supplier (about 1500 barrels a day, only slightly behind Canada, at 1509 BBl/day). I realize there are some good reasons Mexican oil sells for only 57.38 USD (well below Brent Crude's 72.00 USD) per barrel, but... given that many now recognize that Mexico's decision not to join OPEC in 1982 was a major blunder , that higher oil prices will meet the demand for more social benefits (a given, no matter who controls the new administration) ... and, if AMLO wins (as I suspect he will) more willingness to cooperate and coordinate foreign policy with other Latin American and Asian nations. Interestingly enough, Raphel Guillen, AKA "Commandante Marcos", sees a "leftward" trend too. Take it for what it's worth -- Marcos is only relevent to the Mexican right and in his own mind.) U.S. news sources always talk about the need for more foreign investment in Pemex. But, if oil prices go higher, it will take the pressure off Pemex to raise foreign capital. And, besides, what everyone seems to overlook is that foreign capital is already involved (in a small way) in Pemex -- from Spanish, French, Brazilian firms. There's no guarantee that even a conservative administration would open Pemex to Exxon-Mobile or BP or the other giants. Oil is going to go up... so, what's left to exploit. Oh yeah, silver and heavy metals. The Canadians are the leaders here. Dia Brass bought out the Cusa silver mines. They go in for Mexican dirty industries anyway -- makes 'em feel virtuous at home.


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