In the last months, we have
experienced a collapse in the K factor (figure 1), something that has driven
the price of the Mexican crude mix near to the lows we saw during the summer of
2012 (figure 2).
The collapse in the K is a result of the fall in prices of crudes with similar grades that are trading in multi-year low levels and that compete with the MAYA crude in the gulf coast (for instance, Canadian Crudes, figure 3).
The problem with this
is that the 2014 budget assumes an average price of 85 dollars per barrel, when
the Mexican mix is currently trading just below the $90 mark. What make it
worse, is that the K factor has been revised to around -7 this week, (-1.5 compared
to last month), being this K the one that will be in place from December first
until the last day of the month. So, caeteris paribus, the Mexican mix at the
beginning of December will be 1.5 dollars lower. Even if the K should be
revised higher in the future, a sharp fall in the price of crudes globally
could put pressure on Mexico's public finance. Moreover, if this scenario does
not materialize, it is highly probable that the average price of the Mexican
mix will be very close to the budget's assumption, leaving no extra revenues
for the following fiscal year.
