Mexico's Maya crude price for USGC shipments hits record low $5.15/b on NYMEX futures plunge

Houston — The outright price for April Maya shipments to the US Gulf Coast hits its lowest level on record Monday due to the collapse of the May NYMEX WTI futures contract price.

April deliveries of the Mexican heavy sour flagship Maya to the USGC fell $8.75/b from last Friday to $5.15/b Monday, the lowest since S&P Global Platts began publishing Mexico's official selling prices in 1995, based on a pricing formula plus a K factor or constant term.

Maya's outright price Monday was also lowest of all Latin American heavy sour grades competing for business in the USGC.

With extreme volatility in international prices triggered by demand destruction from the coronavirus pandemic and a crude oil war price between Saudi Arabia and Russia, Mexico's crude prices have been hit harder than Colombia's and Ecuador's. Platts assessed Ecuador's Oriente and Napo crudes at $17.60/b and $15.15/b, respectively, Monday, and Colombia's Castilla Blend at $17.49/b.

Mexican Pemex's trading arm PMI last October released a new price formula for Maya deliveries to the Americas, the Caribbean, India, Europe and the Middle East that was implemented December 1. The new formula excluded the fuel oil component in an attempt to reduce the impact of the International Maritime Organization's 0.5% sulfur cap imposed January 1, which was expected to affect heavy sour crudes worldwide.

The new price formula for Maya shipments to the Americas and the Caribbean is 0.65 of the WTI Houston price plus 0.35 of ICE Brent plus a K factor -- a constant that changes every month.

Because of the heavy weight of the WTI component in the formula pricing for Maya deliveries to the USGC, Mexico heavy sour crude prices have been under steep downward pressure during the collapse of international crude prices.

To date in April, the average of the outright price for Maya deliveries in the USGC has been $14.90/b. In the same period of 2019, the average price was $65/b, when the previous price formula was: 0.40 (WTS plus USGC HSFO) plus 0.10 (LLS plus Brent) plus K factor.