Southern Cone gas and power short-term outlook: June 2024 Report

Commodity Market Report 28 June 2024

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Report summary

After several months of intense debate, Argentina sanctioned the Base Law “Ley de Bases” on 27 June. This law introduces a new regime for large investments (RIGI), aiming to promote private investments in infrastructure expansion and, therefore, unlock unconventional gas production potential. In the same direction, Bolivia submitted a draft bill to boost hydrocarbons E&P by establishing mechanisms to encourage private company investments. In June, registered temperatures above the season’s average led power demand to increase by 7% y-o-y in Brazil. The combination of higher demand with lower hydro availability is adding pressure on prices, which are expected to continue on an upward trend until October. Meanwhile, in Chile, the effects of El Niño are still underway, and once again reservoir levels have exceeded the last 14 years series. As a result, hydro output increased 53% y-o-y, bringing marginal costs to continue on a downward trend.