Southern Cone gas and power short-term outlook October 2020

In the first two weeks of October, Brazil was hit by a massive heatwave, resulting in summer-like temperatures; as a result, electricity load in October was 7% higher than the previous month. Besides increasing the power spot price to R$ 293 per MWh, the electricity load also raised gas demand to record levels since pandemic started. The unexpected rise in Brazilian gas demand made Petrobras purchase around six LNG cargoes for October. It also resulted in Bolivian gas deliveries to Brazil in the upper limit of the current contract. At the same time, due to Argentina´s decline of domestic gas production, Argentina is taking volumes from Bolivia above its take-or-pay in October.