Mexican oil sector questions highlight market criticism of Obrador

While being a point of interest and debate among businesses, government official and foreign investors in Mexico since its 2014 privatization by then-President Enrique Peña Nieto, the oil sector has recently seemed to be the major focus of the Mexican economy. President-elect Andrés Manuel López Obrador wants to revitalize the state-sponsored Pemex energy firm without directly opposing the field's privately owned companies, according to Financial Times. This raised wariness among some in the Mexican business community, as well as certain foreign investors.

The news provider pointed out that oil prices are currently close to four-year highs, which establishes some stability for the sector and potentially allows room for Obrador's initiative. Also, Reuters reported that Bank of Mexico governor Alejandro Diaz de Leon believes further jumps in oil costs would problematically increase inflation of the peso, a metric that had notably dropped over the past few months.

Mexico's overall economy is projected to reach a surplus by 2018's end, driven by increased private consumption. The impassioned president-elect has said on numerous occasions that he won't impede private businesses' progress or the Bank of Mexico's independence.

However, this hasn't allayed all of the market's concerns. In addition to his desire for greater public-sector presence and regulation within the oil industry, Obrador's plans to leave completion of a Mexico City airport construction project up to public vote - in keeping with his progressive-populist ideals - drew significant criticism. Some, like Goldman Sachs economist Alberto Ramos, have even dismissed Obrador's fierce anti-corruption stance as "naive." 

Regardless of the various doubts some have in Obrador, the president-elect will assume Mexico's highest executive office in December with an undeniable mandate, due to his landslide electoral victory against the country's entrenched political parties earlier this month. Given such widespread support from the people, the loudest criticisms could simply be an impassioned few rather than a sign of discontent from the Mexican small and medium-sized business community. 

Mexican oil sector questions highlight market criticism of Obrador