Oil report

UPDATE 1-Mexico "always" does oil hedging program - finance minister

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MEXICO CITY, Sept 9 (Reuters) - Mexican finance minister Arturo Herrera said on Wednesday that the country “always” hedges its revenues from oil sales, dispelling any doubts that the billion dollar oil hedging program could be scrapped this year.

The country faced unusual challenges this year after market volatility and lower crude prices sharply hiked the cost of options Mexico typically buys.

“We always do the oil hedging program,” Herrera said at the president’s regular news conference when asked whether the program would continue in 2021.

Herrera did not give further details.

Reuters reported in July that the finance ministry asked Wall Street banks for quotes.

Negotiations are secretive and limited to few participants as both sides attempt to secure the best terms in a highly competitive deal for banks and oil majors.

Herrera’s comments came after market sources in recent weeks said they had not detected market movements that suggested Mexico had started buying put options yet, raising questions about the program for next year.

Mexico’s secretive oil hedging program is the world’s largest and has been a pillar of the budget for more than two decades. (Reporting by Daina Beth Solomon and Stefanie Eschenbacher)