Mexican Energy Slow Down - 9/28/08

When things are bad they can get worse.  The next bad news comes from Mexico.  You might think well that is in Mexico and does not affect us, but this is not the case.

Petroleos Mexicanos (Pemex) reports that its oil output fell 9.2% over the first eight months of 2008 compared to the same period in 2007.  During this same period oil exports are down 16%.  In August the Cantarell oil field showed a 2.3% output decline from July.

Declining Mexican oil output has been going on for four years and appears to be accelerating. 

Pemex revenues from oil sales are flat in the first half of 2008.  Over the last summer Pemex has been selling lower volumes at lower prices while operation costs have been rising. 

The U.S. gets a large portion of its oil from Mexico.  If supply is reduced this will only lead to increase prices at the pump. 

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