Highlights
- The Transco Z6 price dropped below $1/MMBtu to reach an all-time low in July, as a result of ample gas supplies
- Brazilian gas production is rising, helped by pre-salt and associated gas
- Mexico's increasing reliance on pipeline gas imports from the US is denting its LNG needs
- Declining production in Trinidad and Peru is limiting their LNG-export flexibility
Economic overview
The US dollar has strengthened against other major global currencies – helped by the economic crisis in Greece – as it provides a safe-haven for worried investors.
The United States dollar index – which reflects the strength of the dollar against key global currencies – has averaged 96.6 so far in July, almost 20% higher than the average for July 2014. Markets expect the US Federal Reserve to start increasing the country’s benchmark interest rate from September, further supporting the index.
Quarterly and annual year-on-year GDP growth rates
| Q3 2014 | Q4 2014 | Q1 2015 | 2015 | 2016 | 2017 | |
| US | 2.7% | 2.4% | 2.9% | *3.1% | *3.1% | *2.7% |
| Canada | 2.8% | 2.6% | 2.1% | *2.2% | *2.0% | *2.0% |
| Mexico | 2.2.% | 2.6% | 2.5% | *3.0% | *3.3% | *3.5% |
| Brazil | -0.6% | -0.2% | -1.6% | *-1.0% | *1.0% | *2.3% |
| Argentina | 0.0% | 0.4% | 1.1% | *-0.3% | * 0.1% | * 0.3% |
In Latin America, the Brazilian economy is going through a downturn. The country’s GDP contracted by 1.6% in Q1 2015 on an annual basis – the fourth consecutive quarter of negative growth. Meanwhile, the unemployment rate in Brazil rose to 6.7% in May 2015 – its highest level since September 2010. Weakening economics will make Brazilian oil and gas assets riskier for foreign investors.