MEXICO is set to get a record payout of at least US$6 billion from its oil hedges this year, according to trade data.

    The Latin American country locks in oil sales as a shield against price declines through a series of financial deals with banks including Goldman Sachs Group Inc., JP Morgan Chase & Co. and Citigroup Inc. For 2015, Mexico guaranteed sales at almost US$30 a barrel higher than average prices over the past year.

    The 2015 payment, due next month, is set to surpass the record from 2009, when the Mexican Government said it received US$5.1 billion after prices plunged with the global financial crisis. The country’s crude has fallen by almost half over the hedging period so far this year. Crude sales historically cover about a third of the government budget.

    “The windfall is huge,” said Amrita Sen, chief oil analyst at Energy Aspects Ltd., a London-based consulting company. “This gives Mexico breathing space.”

    The hedge, which runs from Dec. 1 to Nov. 30, covered 228 million barrels at US$76.40 each for the Mexican oil basket, according to government documents and statements. With less than two weeks to the end of the program, the basket has averaged US$46.61 a barrel over the period.

    The difference would result in a payment of around US$6.8 billion, not including fees. The final figure could vary from the estimate as some details of the hedge aren’t public and oil prices will change over the next two weeks. The Mexican oil basket fell Nov. 18 to US$33.28 a barrel — its lowest since December 2008.

    The payout would dwarf the profitability of the biggest commodities trading houses and oil hedge funds. (SD-Agencies)