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Is Now A Good Time To Buy Energy Stocks?

Is Now A Good Time To Buy Energy Stocks?

Two bearish factors are weighing…

Mexico’s Biggest Refinery Will Take A Month To Restart

PEMEX

The largest crude oil refinery in Mexico, Salina Cruz, will take between three and four weeks to bring back online after the magnitude-8 earthquake that struck the country last week. The refinery is located in southern Mexico, near the offshore epicenter of the quake that has so far killed more than 90 people.

The Salina Cruz refinery has a daily throughput of 330,000 barrels of crude but the earthquake damaged its turbogenerators, the chief of the Pemex facility told local media. There is no risk of a shortage of fuels, Carlos Miruetta added, as Pemex had bought additional supplies of oil products after Hurricane Harvey suspended fuel shipments from Houston.

Pemex’ chief executive, Jose Antonio Gonzalez Anaya, however, said that putting the refinery back on line would take less time—between two and three weeks. In an interview with Bloomberg, Gonzalez Anaya also said that the company expected to meet its oil production target for this year, which stands at 1.944 million bpd.

He acknowledged that the last few weeks have been challenging in terms of sticking to production targets because of the hurricanes in the Gulf of Mexico that have also made oil field operation in northern Mexico difficult.

Related: Can NAFTA Protect Big Oil From Mexico’s Populist Movement?

Maintenance at the Ku-Maloob-Zaab field also hit production, taking off 330,000 bpd from the national daily average. However, the company said at the time it would not have any adverse impact on its annual output target.

Pemex, and Mexico as a whole, have been struggling with declining production as fields mature and there is no funding for new discoveries. Three years ago, the government decided to end Pemex’s monopoly on the market, inviting private Mexican and foreign companies to bid on oil and gas blocks. The IEA in August said the country produced 2.47 million bpd of crude in 2016, estimating this will decline to 2.29 million bpd this year

By Irina Slav for Oilprice.com

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