Geographic Spotlight: Mexico

Geographic Spotlight: Mexico

Thursday, July 16, 2026. MEXICO ENERGY MARKET OVERVIEW. Mexico is a major crude oil producer and net natural gas importer. Energy sector dominated by Pemex (state-owned petroleum company). CRUDE OIL PRODUCTION: Q1 2026 1.652M bpd (up 38k from Q1 2025). March 2026 1.745M bbl/d (up from 1.736M Feb 2026). 2026 government target 1.8M bpd (facing significant challenges/potential delays). Finance ministry forecast ~1.78M bpd in 2026. 2025 avg ~1.6M bpd. Mid-2025 Aug ~1.64M bpd. KEY CRUDE OIL FIELDS: Maloob, Ixachi, Zaap, Ayatsil, Quesqui. S&P GLOBAL ASSESSMENT: Questions feasibility of 1.8M bpd target; cites ongoing operational issues/need for continued government support. 2026 INVESTMENT PLAN: ~425B pesos (~$21B; 34% increase) to Pemex targeting 1.8M bpd crude/4.5 Bcf/d natural gas through 2030. REFINING: Crude refining rose 22.2% YoY in Q1 2026 to 1.141M bpd. BROADER CONTEXT: Long-term decline from historical peaks; efforts focused on new fields, mixed contracts, attracting private investment. NATURAL GAS PRODUCTION: Q1 2026 wet/hydrocarbon gas 3.925 Bcf/d (up 12% or +423 MMcf/d YoY). Dry gas ~2.3 Bcf/d (recently; projected to stay near 2.299-2.302 Bcf/d in 2025-2026). Q2 2025 3.592 Bcf/d (down ~139 MMcf/d YoY); dry gas from plants 1.615 Bcf/d (down 12% YoY). 2025 FULL-YEAR OUTPUT: ~3.67 Bcf/d total; dry gas ~1.7 Bcf/d. DOMESTIC DEMAND/IMPORT RELIANCE: Domestic demand ~9 Bcf/d (or higher). Domestic production share only ~25%; ~75% imported (mainly via U.S. pipelines). U.S. EXPORT FORECASTS TO MEXICO: ~6.83 Bcf/d in 2025 (up from 6.46 Bcf/d in 2024); continued strength/records expected into 2026 due to Pemex output constraints. HISTORICAL CONTEXT: Pemex dry gas production declined from ~5 Bcf/d in 2010 to ~2.3 Bcf/d recently. LONGER-TERM TARGETS: >4 Bcf/d by 2030 (potentially up to 8.6 Bcf/d with unconventional development). KEY NATURAL GAS FIELDS: Bakté, Ixachi. EXPORT POSITION: Mexico net importer; minimal natural gas exports. THE READ: Crude 1.65-1.75M bpd, 1.8 target at risk, refining up 22%, investment plan in place, long-term decline trend. Gas 3.9 Bcf/d wet, 2.3 dry, 75% imported from U.S., Pemex output constraints driving record U.S. exports to Mexico. MEXICO ENERGY THESIS: Crude production stable but below target, refining gains supporting domestic supply, natural gas heavily import-dependent, U.S. pipeline exports to Mexico at record levels, long-term structural challenge for Pemex. Trade the data, not the headlines.

EIA Petroleum Status Report Released

Wednesday, July 15, 2026. EIA PETROLEUM STATUS REPORT RELEASED. Jul 15, 2026, 10:30 a.m. ET. Covering week ending ~Jul 10, 2026. CRUDE OIL INVENTORY DATA: Prior week (ending Jul 3, released Jul 8): U.S. crude oil inventories 411.4M barrels (+3.0M week-over-week; first build after 10 consecutive weeks of declines). Level ~6% below 5-year average for this time of year. REFINERY METRICS: Crude oil refinery inputs 17.0M b/d (down 173k b/d from prior week). Refinery operable capacity utilization 95.8%. Gasoline production 9.7M b/d (decreased from prior week). Distillate fuel production 5.2M b/d (decreased from prior week). IMPORTS/PRODUCTS: Crude oil imports 5.6M b/d (up 351k b/d from prior week); 4-week avg ~5.4M b/d (down 11.4% YoY). Motor gasoline inventories decreased 1.9M barrels week-over-week. Distillate fuel inventories decreased 5.0M barrels week-over-week (~12% below 5-year average). Total commercial petroleum inventories decreased 4.0M barrels week-over-week. DEMAND METRICS: Total products supplied (4-week avg) 20.6M b/d (+0.3% YoY). 4-week motor gasoline supplied 9.0M b/d (down 2.2% YoY). BROADER CONTEXT: Global/OECD inventory draws due to geopolitical factors (Middle East supply disruptions). OECD stocks heading toward multi-decade lows. Global inventories forecast to shift toward builds later 2026. PRICE FORECASTS: EIA forecasts Brent ~$74/bbl in 3Q26, ~$65/bbl in 2027 amid easing inventory pressure/rising supply. IEA OIL MARKET REPORT (Jul 2026): Refined product cracks/margins at 4-year highs in early Jul as crude supplies rose/prices fell. Global observed inventories rose in Jun for first time in months. NATURAL GAS STORAGE REPORT: EIA Weekly Natural Gas Storage Report (most recent; week ending Jul 3, released Jul 9). Storage level working gas 2,983 Bcf as of Jul 3, 2026. Weekly change net injection +61 Bcf (above consensus ~58-60 Bcf; above 5-year avg ~51-54 Bcf). Year-over-year 15 Bcf below same week last year. 5-year avg 185 Bcf (~7%) above 5-year average 2,798 Bcf. MARKET CONTEXT: Build occurred amid peak summer cooling demand/record heat. Production strong. LNG feedgas near 19 Bcf/d. PRICE IMPACT: Larger-than-expected injection viewed as bearish. Contributed to declines in natural gas futures. Aug contract dropped notably post-report. REGIONAL NOTE: Midwest saw highest net injections (~23 Bcf) in reported week. HENRY HUB FUTURES/SPOT: Henry Hub futures mid-Jul 2026 trading ~$2.89-$2.90/MMBtu (~2.898 recent data). Henry Hub spot Jun 2026 monthly avg ~$3.14/MMBtu. Broader 2026 avg projected near $3.60/MMBtu in EIA outlooks. OUTLOOK: High inventories expected to limit upward price pressure through 2026. Henry Hub spot forecast to avg just under $3.50/MMBtu for year in some EIA projections. Next release Jul 16, 2026 (Thursday, 10:30 a.m. ET). THE READ: Crude first build after 10 weeks of declines, inventories 6% below 5-year average, refinery runs down, demand flat, geopolitical premium fading. Support $75, resistance $82. Gas larger-than-expected injection bearish for near-term, high inventories limiting upside, target $3.50 for year. WEEK 28 MIDWEEK THESIS: Crude inventory build signals easing supply stress, geopolitical premium fading. Support $75, resistance $82. Gas storage build bearish, high inventories limiting upside, target $3.50 for year. Trade the data, not the headlines.

Technicals: Week 28

Tuesday, July 14, 2026. CRUDE OIL TECHNICALS. WTI crude oil trading ~$79.40-$80.05. Sharp recent rally. Price surged 10%+ in week leading into Jul 14 driven by geopolitical developments (US measures affecting Iranian oil transit through Strait of Hormuz). TECHNICAL SIGNALS: Strong Buy based on technical indicators/moving averages. RSI(14) ~80.7-82.0 (Overbought territory; potential caution for pullbacks/consolidation). MACD(12,26) ~1.72-1.73 (Buy signal; bullish momentum). Overall technical summary Strong Buy (8-12 buy signals across indicators, 0 sell). PIVOT POINTS: Classic pivot ~79.51. Supports 79.12/78.69/78.3. Resistances 79.94/80.33/80.76. BOLLINGER BANDS: Limited specific Jul 2026 data. Prices consolidating near middle band after decline, suggesting waning bearish momentum. No strong upper band touch/squeeze noted in latest analysis. SUPPORT/RESISTANCE LEVELS: Support zones around 73-74, 70-71. Lower Fibonacci retracements ~68-70 area. Resistance near-term around 80-82. Longer-term Fibonacci extensions higher. CONTEXT: Earlier Jul RSI was oversold (~29) with bearish MACD bias. Prices hovered mid-$68s before recent rally. MOMENTUM: Strong recent momentum (+2%+ daily moves) aligns with bullish MACD/RSI overbought conditions. Watch for potential reversal if RSI fails to sustain or price rejects upper levels. NATURAL GAS TECHNICALS: Henry Hub futures ~$2.89/MMBtu (down 0.19% from prior day; down 1.63% or -1.70% in some reports). CME FUTURES: NGQ26 last at $2.902 (-1.29%) as of Jul 13 close. Investing.com futures $2.891 (-1.70%), previous close $2.896. RECENT PRICE ACTION: Jul 10 close $3.02. Jul 9 $3.22. Intraday ranges recently around $2.87-$3.02. SPOT VERSUS FUTURES: EIA spot Jul 6 $3.29 (down from $3.34 prior; weekly/daily updates lag). Spot prices lagging at higher levels (~$3.29 early Jul). Futures trading near $2.89-$2.90. THE SETUP: Crude overbought, RSI 80+, watch for pullback. Support 78.3-79.12, resistance 80.33-80.76. Gas futures down, spot holding higher, contango structure intact. WEEK 28 TECHNICALS: Crude Strong Buy but overbought, caution for pullbacks. Support 78.3, resistance 80.76. Gas futures down, spot holding, accumulation zone intact. Trade the charts, respect the levels.

Week 28 Opens: Strategic Positioning

Monday, July 13, 2026. WEEK 28 OPENS. WTI crude oil trading ~$74.42 (open $73.79, high $74.64, low $73.72, +0.87%). Sharp rebound from prior session. CME live quote late Jul 12 showed $74.36 (+4.13% or +$2.95 on day). CRUDE OIL SETUP: Prices risen from lows near $68-$71 earlier in July. Upward momentum into mid-month (fluctuated $68.55 Jul 6 to $73.52 Jul 8). Well below 2025-early 2026 highs (over $100 in some periods). KEY LEVELS: Resistance $74 (potential decision point for bullish moves above or bearish below ~$70). Support $70, resistance $75-$76. TECHNICAL SETUP: Crude consolidating mid-$70s range. Doha talks progress supporting sentiment. Watch for Strait of Hormuz developments. Geopolitical premium intact but fading. NATURAL GAS: Most recent spot Jul 6 $3.29/MMBtu (down from $3.34 prior day). Futures Jul 12 ~$2.915/MMBtu (-0.025 or -0.85%). Jul 10 futures close ~$2.95 (or $2.94 in some reports). Earlier July spot hovered $3.21-$3.34. DOHA TALKS UPDATE: Indirect US-Iran technical talks in Doha concluded ~Jul 1-2, 2026. Focus on Strait of Hormuz/related issues under earlier interim MOU. FORMAT: Indirect/technical talks (not direct bilateral meetings in all accounts). US envoys Steve Witkoff/Jared Kushner meeting Qatari officials (Emir/Prime Minister) alongside Iranian technical delegations via mediators. Qatar/Pakistan facilitated. PRIMARY TOPICS: Maritime traffic/shipping resumption through Strait of Hormuz (critical chokepoint handling ~20% global oil trade). Unfreezing Iranian assets/funds (~$6B references). Implementation of prior MOU/ceasefire. OTHER TOPICS: Nuclear issues, Lebanon ceasefire, broader peace discussed but limited headway. OUTCOMES: "Positive progress" or "building on" Jun interim MOU that halted fighting. Both sides agreed continue talks. No breakthrough on lasting peace deal or full nuclear agreement. VP Vance described talks as "going well" and "still pretty early." CONTEXT: Followed tit-for-tat US-Iran strikes over Hormuz shipping disputes earlier 2026. Initial interim deal mid-Jun 2026 halted attacks, reopened strait to pre-war shipping levels, extended ceasefire (~60 days in some reports), paved way for further nuclear talks. Iran faced accusations of attacks/toll proposals; US pushed against fees/tolls in favor of broader economic incentives. RECENT DEVELOPMENTS: Talks occurred ahead of/around funeral for Iran's former Supreme Leader Ali Khamenei (killed in earlier strikes). Some reports noted pauses/questions about resumption post-funeral (around Jul 11) amid mentions of additional US strikes. STATUS: As of early Jul, existing Hormuz-related agreements remained in place despite stalled broader negotiations. THE READ: Crude consolidating mid-$70s, Doha talks progress supporting sentiment, geopolitical premium intact but fading. Support $70, resistance $75-$76. Gas $3.29 spot, $2.915 futures, accumulation zone intact. WEEK 28 THESIS: Crude Doha talks progress positive, Hormuz risk declining, geopolitical premium fading. Support $70, resistance $75-$76. Gas accumulation zone intact, target $4.00+. Trade the data, not the headlines.

Geopolitical Tensions Rising

Wednesday, January 8, 2026. WEEK 2 MIDWEEK UPDATE. WTI crude oil settled at $57.76, up $1.77 or 3.2%. Sharp rebound after two consecutive days of declines. Two-week high. Brent up 3.4% to $61.99. KEY DRIVERS: US actions on Venezuela's oil sector following reported capture of former leader Nicolas Maduro. Energy Secretary Chris Wright announced US oversight of Venezuelan crude sales. Intensified sanctions including seizure of Venezuela-linked oil tankers (one reportedly under Russian flag). Geopolitical tensions/supply concerns involving Russia, Iraq, Iran. President Donald Trump warning to Iran regarding protests/potential crackdowns. Broader reassessment of geopolitical shifts in Americas/Middle East. NATURAL GAS: Henry Hub spot price ~$2.92/MMBtu Jan 8, 2026. Low $3 range or below around that time (below $3 Jan 9). Note will spike sharply later month due to Arctic blast (all-time highs near $28-$30/MMBtu around Jan 23-26). IRAN/STRAIT OF HORMUZ: Strait remains open with normal shipping traffic but geopolitical tensions rising sharply. Internal Iranian unrest, US warnings of potential military intervention. Market concerns over possible future disruptions to crude oil flows (normally ~20-25% global seaborne oil trade). PRE-CONFLICT BUILDUP: Iranian protests erupted late Dec 2025, intensified Jan 2026 after brutal crackdown. US threatened intervention, raising fears escalation could prompt Iran to threaten/close Strait. MARKET WARNINGS: Jan 12, 2026 report highlighted Strait returning to focus amid possible US action against Iran. Experts cautioning confrontation could lead Tehran to disrupt chokepoint. OIL PRICE OUTLOOK: BloombergNEF analysis projected Brent averaging $55/bbl for 2026 (assuming no major Iran-related disruptions) but noted risks of prices reaching $91/bbl in disruption scenario. POLYMARKET BETTING: Contracts on whether Iran would close/restrict Strait by Jan 31, 2026 resolved to No (reflecting no closure occurred in month despite tensions). BROADER FLOWS: EIA data showed Strait of Hormuz crude/condensate flows averaging ~20-21M bpd in prior periods; no Jan 2026 specific drop reported. THE SETUP: Crude Venezuela focus, Iran tensions rising, geopolitical premium building. Support $55, resistance $60. Gas $2.92/MMBtu, Arctic blast coming late month, expect volatility. WEEK 2 THESIS: Crude geopolitical premium building, Venezuela sanctions, Iran tensions. Watch for Strait escalation risk. Support $55, resistance $60. Gas expect volatility, Arctic blast late month, heating demand coming. Trade the data, not the headlines. TEAM NOTE: Energy Markets Daily team taking break this week and next. Usual daily cadence will return soon. Thank you for attention and support.