(Adds price details, context)
MEXICO CITY, March 18 (Reuters) - Mexico’s flagship heavy crude fell on Wednesday to the lowest level since January 2002, according to S&P Platts, as global oil benchmarks plunged because of declining demand in reaction to the coronavirus outbreak.
The official selling price for deliveries of Maya crude to the U.S. Gulf coast closed at $12.92 per barrel, down $6.21 from the previous day. On Jan. 17, before the impact of the coronavirus was felt in the Americas, it stood at $55.15.
Oil markets have been reeling since Saudi Arabia boosted supplies earlier this month after failed talks between members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, like Russia, over a new output cut in anticipation of weaker demand.
U.S. crude futures hit an 18-year low on Wednesday with WTI settling at $20.37 a barrel as governments worldwide started taking increasingly drastic measures to counter the coronavirus pandemic.
Brent crude, a benchmark for many Latin American grades, settled down $3.85 on Wednesday, at $24.88 a barrel. WTI at East Houston WTC-MEH, a key component of the Maya formula, traded at a midpoint of $1.25 a barrel below WTI.
Mexico’s national oil company Petróleos Mexicanos, or Pemex , adjusts its monthly pricing formulas for crude oil shipped to customers in the Americas, Europe and the Far East by changing the so-called K-factor. A recent adjustment has not been made.
Oil exports are one of Mexico’s main sources of budget revenue, and the country hedges its oil sales every year to protect itself from price variations. Pemex has its own, smaller oil hedging program.
But the company’s chief on Wednesday said its 2020 hedge is not expected to solve all its financial problems for heavily indebted Pemex, so it plans to reinforce austerity measures while prioritizing profitable projects.
Reporting by Stefanie Eschenbacher and Marianna Parraga; Editing by Sandra Maler and Richard Chang