Mexico has taken the first steps in the world’s largest annual oil deal, asking Wall Street banks and other traders for quotes to lock-in its income from production through next year, according to people familiar with the matter.
The country has been asking counterparties this week for quotes to hedge output, the people said, asking not to be identified because the information is confidential. One of the people said the ministry has begun executing trades. Mexico’s Finance Ministry declined to comment on the hedging program, which usually begins each year in May or June. The oil hedge, a multibillion-dollar deal which typically covers between 200 million and 300 million barrels, has the potential to roil the market.