Mexican liquids production in January recovered to 2.927 mb/d, a five month high and higher y/y by 36 thousand b/d. Crude output meanwhile was higher y/y by 40 thousand b/d, at 2.56 mb/d, but was at a three month low. Preliminary February data showed crude output stable at 2.57 mb/d, with output at the Ku Maloob Zaap field broadly flat, at 0.87 mb/d, and Cantarell output up 5 thousand b/d to 0.397 mb/d. The Chicontepec basin produced 75 thousand b/d, flat m/m. Despite the KMZ field reaching its plateau in late 2012, we do not expect output to fall substantially in 2013 as new volumes from the Kuril and Tsimin fields are likely to provide support and offset natural declines in the country's maturing asset base. Moreover, PEMEX plans to double its spending this year to $25.3 billion, of which $20 billion is earmarked for upstream activities. Our forecasts are for a y/y decline of just 60 thousand b/d in 2013.
January crude exports recovered to 1.29 mb/d following a steep drop in exports in December, with y/y growth at 98 thousand b/d. Crude exports to the US climbed back above 1 mb/d, with demand for heavy crude in the Gulf Coast remaining strong. Total demand, at 1.81 mb/d, was higher y/y by 62 thousand b/d, supported by improving industrial growth and a buoyant auto industry. Diesel demand was higher y/y by 15 thousand b/d and fuel oil by 32 thousand b/d. Refined product output was higher y/y by 52 thousand b/d, at 1.48 mb/d, although imports were down sharply to 0.496 mb/d, lower y/y by 0.13 mb/d, a sharp drop relative to the average of 0.79 mb/d for the previous three months. Gasoline imports were lower y/y by 0.11 mb/d, falling for the second consecutive month due to high stock piles.