Mexico to sell more oil after fires upend plan to curb exports

Petroleos Mexicanos is offering more cargoes of oil to its customers after fires struck two of its refineries, hampering its plan to keep crude supplies to produce fuels domestically.

Pemex’s PMI trading arm told some US refiners that it may have more crude to sell than initially expected during May, according to people with knowledge of the situation. That’s a change from earlier this month, when the state oil company told customers it would sell less oil and keep more for its own refineries. 

Pemex didn’t immediately return messages seeking comment. 

Mexico’s decision to export more is sending prices of competing sour oils lower, with Mars crude produced in the Gulf of Mexico now trading at $1.70 less than benchmark Nymex West Texas Intermediate, according to Syntex Energy. That’s the widest discount since October. Prices of Southern Green Canyon reached the lowest in more than a year.

Mexico’s refineries had been operating near their highest utilization rates in six years until a series of setbacks in recent days. Over the weekend, a boiler at the Salina Cruz refinery caught fire, newspaper Reforma reported, and on Friday the Minatitlan refinery had a fire and explosion, according to La Jornada. Earlier this month, Pemex also said that the new Dos Bocas refinery would reach full production by September, six months later than previously expected.