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Mexico’s government hedged oil exports for next year at an average $49 a barrel, locking in protection against low crude prices, the nation’s Finance Ministry said.

Mexico spent $1.09 billion for the put options, giving it the right to sell 212 million barrels at the hedged prices, the ministry said Thursday on its website. That’s more than the $773 million Mexico spent last year on hedging, reflecting the almost 60 percent slump in the oil price over the past year.

The ministry said the options, purchased in 44 transactions from June 9 to Aug. 14, will cover the portion of next year’s budget that’s vulnerable to lower crude prices. The government is due to send its full budget proposal to Congress by Sept. 8. Mexico traditionally implements its hedge later in the year, often finishing as late as November.

The price Mexico negotiated for 2016 is 36 percent lower than the $76.40 a barrel hedge obtained for this year. Still, $49 a barrel is higher than current market prices for next year. The West Texas Intermediate 2016 calendar swap, which reflects the average price U.S. crude oil for next year, stood at $47.54 a barrel on Thursday.

Mexico’s hedging program has often roiled energy markets since its introduction in the early 1990s as banks acting on behalf of the country sell futures to cover their own options positions.

“This Mexico hedge probably has exacerbated the sell-off in long-dated oil contracts we have seen since June,” Torbjoern Kjus, an analyst at DNB ASA in Oslo, said by e-mail.

Forward Curve

Oil futures for delivery next year and further out have weakened in recent weeks. The price for one-year WTI forward contracts on Thursday dropped to $47.57 a barrel, which would be the lowest closing price in 10 years.

“When Mexico hedges, it does tend to move the back end of the forward curve down as they do their hedges in large volumes,” said Abhishek Deshpande, an analyst at Natixis SA in London.

Mexico engaged Morgan Stanley, Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. among others to implement the hedge, people with knowledge of the program said last month.

Finance Minister Luis Videgaray said in April that the country planned to hedge exports for 2016, after locking in prices for annual sales of about 200 million barrels over the past several years.

“Certainly, it will not be a hedge at the price we were able to get for this year’s hedge, but we’ll take what the market gives us,” Videgaray said in an interview at the time.

The Mexican government, which depends on oil for about a third of its revenue, is set to profit from the 2015 hedge. The average price this year for Mexico’s main oil export is $48.90 a barrel, more than a third below the $76.40 at which it hedged.

(Updates with analysts’ comments in sixth, eighth paragraphs.)