Reassessing Mexico’s Energy Overhaul | Weekly News Update

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Uncertainty in Mexico’s energy market grows as presidential front-runner plans to freeze the oil auction process until they begin to see results. Germany favors clean air in ruling that allows certain vehicles to be banned. Energy news across the globe was present including Canada, US, and the United Arab Emirates.

Presidential Front-Runner to Reassess Energy Reform

López Obrador, a leftist nationalist is currently the presidential front-runner in Mexico’s upcoming election in July.  If Obrador wins, he plans to freeze the oil auction process until they see successful results.  In the past three years, Mexico has held eight auctions, awarding 91 exploration and production contracts which is estimated to have an investment of $150 billion.  All current contracts are expected to be reviewed and honored, but no additional contracts will be awarded until the first auction is assessed, says Rocío Nahle, a congresswoman and top energy adviser for Obrador.

This announcement adds uncertainty to the Mexican oil market.  President Enrique Peña Nieto created the energy overhaul to reverse Mexico’s declining oil production and make Mexico a more competitive energy market.  Obrador on the other hand plans to strengthen the state oil company, Petróleos Mexicanos (PEMEX).  His plan to do that is shifting from exporting crude oil to exporting more expensive refined products.  Obrador plans to build two state-run refineries.

German Court Rules In Favor of Vehicle Ban

On Tuesday, February 27, Germany’s highest administrative court ruled vehicles can be banned from some city streets to improve efforts on air quality.  The ban could come into effect for some cities as early as the fall of 2018.  This decision could have a major impact on the country’s automakers.  The decision is intended to only ban older model vehicles with the highest emissions, focusing on diesel powered vehicles.  However, the ruling allows different cities to set their own rules which may result in confusion to consumers.  The cities that are expected to implement the ban first will include Stuttgart and Düsseldorf, due to pollution levels being the highest.  Stuttgart is home to Porsche and Mercedes.

In Other News

2/23

Winnipeg Sun: Manitoba signs on for Canadian climate change plan

Manitoba has now joined the Pan-Canadian climate-change framework after holding out for more than a year.  But the province’s Sustainable Development Minister said she’ll keep fighting to charge a different carbon price than the feds have ordered.

2/26

Reuters: Corporate America’s new dilemma: raising prices to cover higher transport costs

The drive for cost cuts and higher margins at U.S. trucking and railroad operators is pinching their biggest customers, forcing the likes of General Mills Inc (GIS.N) and Hormel Foods Corp (HRL.N) to spend more on deliveries and consider raising their own prices as a way to pass along the costs.

WSJ: Presidential Front-Runner Wants to Reassess Mexico’s Energy Overhaul (Paywall)

The front-runner in Mexico’s presidential race would hit the brakes on the rapid pace of private investment in the country’s newly opened oil-and-gas sector if he wins the July election, a key adviser to Andrés Manuel López Obrador says.

2/27

Reuters: White House pushes for more talks after ‘no deal’ on biofuels

U.S. President Donald Trump has asked for more talks between representatives of the oil and corn industries after a meeting on Tuesday failed to yield an agreement on how to help refiners cope with the country’s biofuels policy.

NY Times: German Court Rules Cities Can Ban Vehicles to Tackle Air Pollution

Germany’s highest administrative court ruled on Tuesday that vehicles can be banned from some city streets as part of efforts to improve air quality in urban areas, a decision that could have far-reaching consequences for the country’s automakers and the diesel technology they promoted for decades.

2/28

Reuters: OPEC February oil output falls as UAE over-delivers on cut

OPEC oil output fell in February to a 10-month low as the United Arab Emirates joined other Gulf members in over-delivering on a supply reduction pact.

3/1

CCJ: Indicators: Spot market rates recede in February from January high marks

Per-mile rates eased in February on the spot market, according to monthly rates data from Truckstop.com, dipping from record high averages set in January.

3/2

Reuters: Oil rises as Wall Street bounces off lows, crude posts weekly loss

Oil prices rose on Friday as Wall Street stocks bounced off session lows, but benchmark crude futures posted their first weekly decline in three weeks on fears U.S. plans to impose tariffs on steel and aluminum could squeeze economic growth and jitters about rising U.S. crude production.

This weekly publication is designed to highlight relevant industry news to provide professionals in the transportation, supply chain, and energy sectors with up-to-date information in a rapidly changing marketplace. This update is purely a compilation of industry news and as such, does not necessarily reflect the opinion of Breakthrough®Fuel. We do not warrant or guarantee accuracy or completeness of information. For additional information, please contact us at info@breakthroughfuel.com.

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