OBELA Analysis

The international natural gas market has seen changes in the last quarter of 2020: an increase in supply by the French company TOTAL in Mozambique; a slight recovery in the international price; and changes in South American contracts for export destinations. 
In Latin America, the main supplier of gas in its gaseous form is Bolivia, and the two major suppliers in its liquefied form are Trinidad and Tobago. Bolivia has had contracts with Argentina and Brazil since the 1970s. With Argentina it was revised in 2021. Trinidad and Tobago has an outward-oriented oil industry and exports to the US, Spain, the Dominican Republic and China. Peru is making efforts to stop exporting to Mexico.

Latin American countries will continue with natural gas production because of its importance in electricity generation, international trade and tax revenues.
 

The economic outlook during 2020 has been very adverse worldwide, with employment in the US and globally falling more since the confinement than in any other crisis. The economic circumstances are unusual for those who remain in their occupations. Approximately 93% of the world's workers have been affected in some way by full or partial shutdowns of economic activities in an attempt to contain the health crisis. 

Unemployment in the US, according to official figures from the US Department of Labor (DOL), reached 15 per cent in April 2020, up from 10 per cent during the 2008 crisis, the worst figure in recent history. 

The US economy faces a very adverse employment environment and the challenge of creating conditions conducive to economic recovery. Overall, widespread vaccination may take time, condemning the West to even more prolonged confinement, more prolonged unemployment and more impoverished living conditions.

The Latin American countries that improved the most during the third quarter of 2020 are those that will continue to grow in 2021. Economic performance is influenced by previous growth, restrictions to avoid contagion from covid-19 and fiscal and monetary policies. 

Costa Rica, Argentina, Jamaica, Ecuador and Chile had problems with large company exits, social unrest, dependence on the oil sector and tourism, making them the slowest rebounders in the third quarter of 2020. Mexico recovered a little less than half, the best performer among the least rebounding. Those that improved the most are Brazil, Nicaragua, Colombia and Peru. 

The main risks to the 2021 improvement are: the evolution of the pandemic and vaccine availability; premature withdrawal of fiscal and monetary stimulus measures; global financial conditions allowing access to cheap financing; and the upward trend in commodity prices.