Mexican liquids production fell m/m by 77 thousand b/d to 1.99 mb/d in October, lower y/y by 0.18 mb/d. This is the first time liquids production has dipped below 2 mb/d, according to our records dating back to 1995. Super light crude led the m/m decline, with production down by 61 thousand b/d. Light output increased m/m by 20 thousand b/d, sharply lower y/y, while heavy crude output fell by 20 thousand b/d m/m, to 1.07 mb/d, but was higher y/y by 24 thousand b/d. NGL production fell m/m by 16 thousand b/d to 0.22 mb/d, lower y/y by 40 thousand b/d.
Crude exports fell m/m by 0.18 mb/d to 1.03 mb/d in October, lower y/y by a massive 0.32 mb/d, albeit on a high base. The decline in exports was due to shipments to the Far East, which were down y/y by 0.27 mb/d, while movements to the Americas were up by 38 thousand b/d y/y. However, the K-factors do not make Mexican crude particularly competitive in the USGC, so we expect exports to the Americas to decline in November and December. The drop in exports was likely compounded by hurricane activity in the Gulf of Mexico in October. Refinery runs likely remained flat m/m at 0.6 mb/d, up y/y by 56 thousand b/d on a low base. However, November crude exports have decreased m/m to 1.03 mb/d, based on Kpler cargo-tracking data, so runs may have picked up marginally. Oil demand fell by 80 thousand mb/d y/y to 1.62 mb/d, even on a low base from last year’s earthquakes. The decline was led by fuel oil and gasoline demand, which fell by 86 thousand b/d and 42 thousand b/d y/y respectively. However, diesel demand increased y/y by 61 thousand b/d, keeping pace with last month’s record growth, once adjusted for third-party sales based on preliminary figures. LPG demand fell y/y by 10 thousand b/d to 0.26 mb/d, also adjusted for third-party sales based on preliminary figures.