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....
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