Economist Luz Elena González Escobar will helm Mexico’s energy ministry Sener come October, President-elect Claudia Sheinbaum announced Thursday.
In a message on social media, González Escobar thanked Sheinbaum for considering her “for such an important post.” She added, “I reiterate my commitment to serving the people of Mexico, through an energy policy that will continue to guarantee national sovereignty and will at the same time advance the energy transition.”
The two women are close allies. When Sheinbaum was mayor of Mexico City, González Escobar was her finance chief.
“She is a bright official, but with little experience in the energy sector,” Mexico City-based energy consultant Gonzalo Monroy told NGI’s Mexico GPI. “A lot of people are saying this is a new beginning.”
He added, however, that Sener’s role in the energy sector has been diminished as state firms Comisión Federal de Electricidad (CFE) and Petróleos Mexicanos (Pemex) gain bigger roles.
“In reality, Sener has little to no interference or say in Pemex or CFE operations. And at the end of the day, the most pressing needs are in Pemex and CFE’s financial positions,” Monroy said.
The market may now turn to see who will be appointed to head the two state behemoths. Jorge Mendoza Sánchez of development bank Banobras has been rumored to lead CFE, a company with increasing relevance in the natural gas market. Mendoza Sánchez previously worked at CFE during the Enrique Peña Nieto government.
With Pemex’s finances of grave concern, “it’s likely that we will see a financial guy,” such as finance ministry undersecretary Gabriel Yorio take the top role, Monroy said. Yorio has been working to renegotiate Pemex’s massive debt burden.
Overall, analysts said the incoming cabinet has been filled with expertise and academic credentials. Sheinbaum on Thursday confirmed that Finance Minister Rogelio Ramírez de la O would continue to serve in her administration.
One contact in the market told NGI’s Mexico GPI that in a recent meeting with the CEOs of major companies, Sheinbaum came across as open and willing to engage with the private sector.
Market News
New York Mercantile Exchange August futures shed 6.0 cents day/day and settled at $2.685/MMBtu on Thursday as ample production continued to keep a lid on prices. Futures prices have failed to find momentum early this summer despite scorching temperatures.
For the past 10 days through Thursday, Mexico imported 7.03 Bcf/d of pipeline gas from the United States. That was down 0.38 Bcf/d over the previous 10-day period, according to NGI data.
Imports to-date in June have averaged 7.36 Bcf/d, down slightly from May.
Lower imports “may be attributed to the mild weather in central Mexico for the past week, with average temperatures during the day staying in the 70s and nightly temperatures dropping to the upper 50s and low 60s,” NGI markets analyst Josiah Clinedinst said.
Mexico Prices
In Mexico on Wednesday, natural gas cash prices at Los Ramones fell by 8.2 cents day/day to $2.734, according to NGI data. Monterrey via the Mier-Monterrey system was down 8.1 cents to $2.498. Tuxpan in Veracruz via Cenagas saw the spot price fall 8.5 cents to $3.293.
Out West, the Guadalajara natural gas price rose 26.2 cents to $2.513 cents on Wednesday. Farther north in El Encino, prices via Tarahumara were 74.6 cents, 61.3 cents higher than the previous day.
On the Yucatán Peninsula, the cash price at Mérida was $4.376 on Wednesday, down 9.0 cents.
U.S. Storage
On Thursday, the U.S. Energy Information Administration (EIA) reported a 52 Bcf injection into storage for the week ending June 21. The figure sent prices lower.
The South Central region, close to Mexico pipelines, saw a build of 11 Bcf that included a 14 Bcf increase in nonsalt stocks and a withdrawal of 3 Bcf in salts.
For the week ended June 21, total working gas in the U.S. South Central region stood at 1,179 Bcf, up from 1,127 Bcf for the same time one year ago. The figure was 156 Bcf higher than the five-year average of 1,023 Bcf.
Inventories in the South Central region are getting tighter. They were 18% above the five-year average as of May 31, according to EIA. However, that was down significantly from mid-March, when South Central stocks were 42% above the five-year average.
