MEXICO: What Pemex's $1.17 Billion Hedge Says About Oil's Future Price?

FT ONLINE/ Analysis/
Should Pemex's dim view on 2010's oil price alarm oil market analysts?
Mexico's Finance Minister Agustin Carstens may havebet his future by a more conservative view of hedging at $57 bbl than the futures market where the Nymex December 2010 contract was trading yesterday above $82 a barrel while the January 2010 contract was trading at around $73. "It does not mean that Mexico believes that oil prices will fall as low as $57 a barrel," says Michael Wittner at Société Générale: "It's an insurance policy and the deal is all about managing risk."