Highlights

  • The US and Canada are facing the prospect of another gas storage glut this year
  • Gas production from US shale plays is set to see yet another year-on-year increase in 2015
  • Several Latin American countries are striving to attract foreign upstream investment amid low oil prices
  • LNG import tenders from Argentina and Mexico have failed to boost spot LNG prices in Latin America

Economic overview

The United States is seeing underlying economic growth despite weaker-than-expected GDP figures for Q1 2015.

Official data showed that United States GDP grew by 0.2% in Q1 2015 compared with the previous quarter, but it is not unusual to see weak growth in Q1. US GDP contracted by 2.1% in Q1 2014 compared with Q4 2013, but then showed strong growth in the subsequent two quarters of 4.6% and 5% respectively. Government figures also showed the country’s GDP expanded by 3% in Q1 2015 year on year, which was higher than the average growth rate of 2.4% for last year.

Quarterly and annual year-on-year GDP growth rates

 Q3 2014Q4 2014Q1 2015201520162017
US 2.7% 2.4% 3.0% *3.1% *3.1% *2.7%
Canada 2.8% 2.6% *2.2% *2.2% *2.0% *2.0%
Mexico 2.2.% 2.6% *3.0% *3.0% *3.3% *3.5%
Brazil -0.6% -0.2% *-1.0% *-1.0% *1.0% *2.3%
Argentina 0.0% 0.4% *-0.3% *-0.3% * 0.1% *0.3%
Source: regional government sources. *IMF WEO projections

Meanwhile, the unemployment rate in the US stood at 5.4% in April – its lowest level since April 2008. An improving economy will support investment in the oil and gas sector.

Low oil prices are still hurting economies such as Colombia and Venezuela, however, as a result of falling oil-export revenues. Analyst estimates suggest Venezuela may have received only around $50 billion in net oil revenues last year – almost $24 billion less than the gross revenue for the year. Latest figures indicate the country’s GDP contracted in each of the first three quarters of 2014 on an annual basis.

Meanwhile, Colombia’s GDP grew by 3.5% year on year in Q4 2014, which was lower than the average growth rate of 4.6% in 2014. In March, the International Monetary Fund slashed its outlook for the country’s 2015 GDP growth rate to 3.5% from its previous estimate of 4.5%.