Mexico closes main oil ports due to bad weather

Originally found at the Oil Drum. Mexico is 9th in the world’s exporters, but 3rd in terms of US sources of oil.

Mexico closed all of its main oil exporting ports on Sunday due to bad weather, the transport ministry said on its Web site.

Mexico’s exports have been repeatedly disrupted in recent months by bad weather that has halted shipments for days at a time and, in some cases, triggered the evacuation of oil rig workers.

This relates to an ongoing discussion I have with people – the price of oil vs. gasoline. The latter has benefitted mightily from the buffer of (a) refining stocks in the US, and (b) refining capacity (demand generating enough monopsony power that the US can get better prices). But US refinery stocks of gasoline haven’t been doing so well (I was too lazy to make a nice graph):

EIA gasoline stocks

And raw material stocks aren’t performing any better – to the extent that there is little in the way of a buffer.

Crude oil stocks

Data courtesy of the US government’s Energy Information Administration. This data extends only to October 2007 – meaning it does not include 2 more months of probable running-down of those stocks.

So pessimism, basically, is my point – don’t expect those gasoline prices to fall far, too soon.

Mind you, Mexico’s peak has come and gone – its position in the field of US suppliers will most likely do the same (image stolen from the Oil Drum’s Oilwatch Monthly).

oilwatch chart

We shall see, by and by, what the US Government’s adeptness at Supply Chain Management is like.


2 comments so far

  1. Lou Ceballos on

    Great analysis, I agree with you because not only for the Mexican economy, but also for the American economy, the consequences of a downturn on oil production are important for North America.

    Last time this happened, Mexico lost about 150 million dollars in oil revenue. Normally these restrictions last a few days.

    Great blog, and congrats for your accurate analysis!


  2. zooeygoethe on

    Yeah – I did not even go near the effects on Mexico’s economy. Well spotted.

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