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Markets & Forecasts

High oil prices to dent Brazil’s appetite for gas

Brazil will need to reform gas prices to make the fuel more affordable to end-users or else the country’s power mix will diversify further away from gas Brazil will need to reform gas prices to make the fuel more affordable to end-users or else the country’s power mix will diversify further away from gas.
By Abhishek Kumar 25 October 2018 Americas / Supply & Demand 0 33043
The Euzebio Rocha thermoelectric power plant in Brazil. (Petrobras)

Directional impact on forecast:
Downbeat for Brazil’s gas demand

Brazil has a gas-price problem that threatens to limit the benefits of its pre-salt reserves. Brazilian domestic gas prices are linked to those of oil, meaning recent increases in oil prices will remain a headwind to Brazil’s gas demand. Consequently, there is a greater push to diversify Brazil’s generation portfolio away from gas by increasing the shares of renewables such as biomass, solar and wind.

Gas is not coming cheap to most end-users in Brazil....