NEW YORK/MEXICO CITY, July 24 (Reuters) - Mexico has asked top Wall Street banks to submit quotes for its giant oil hedging program, sources familiar with the matter said on Friday, while trading in crude oil options has increased this week ahead of the megadeal.
The Finance Ministry has asked banks for price quotes, one source with direct knowledge of the matter said, signaling the beginning of the process to execute the hedge. The ministry did not immediately respond to a request for comment.
Every year, Mexico buys as much as $1 billion in financial contracts, the world’s largest oil hedge program, to protect its oil revenues. Bankers and officials on both sides of the deal expect a smaller hedge this year because the options used to protect oil profits are more expensive than last year. (Reporting By David Gaffen Editing by Marguerita Choy)