By Gram Slattery and Marta Nogueira, Reuters

RIO
EnergiesNet.com 02 25 2022

Brazilian state-run energy company Petrobras will closely monitor international oil price swings following Russia’s invasion of Ukraine before making any decisions on domestic fuel prices, the firm’s logistics and trading head said on Thursday.

Oil prices jumped on Thursday, with global benchmark Brent crude rising above $105 a barrel for the first time since 2014, after Russia’s attack on Ukraine exacerbated concerns about disruptions to global energy supply.

The company, formally Petroleo Brasileiro SA , says it aligns domestic prices with international rates but allows prices to decouple during brief periods when it understands international volatility to be a product of short-term shocks rather than structural factors.

The market takes a keen interest in precisely how these determinations are made, as cushioning consumers from rising prices can eat into profit margins. Multiple analysts on a call to discuss the firm’s annual results on Thursday insisted that current levels were below parity.

“The present moment, today in particular, brought a much more elevated level of volatility to the market, which we’re still observing,” Petrobras’ Claudio Mastella told analysts. “We still need to better evaluate what the impacts will be before taking a position on that.”

Mastella added that the strengthening of the Brazilian real against the dollar in recent weeks has countered rising Brent prices, allowing the firm to keep prices level.

The company posted a record annual profit on Wednesday on the back of sky-high oil prices.

Net income figures hit expectations, though analysts at UBS and local brokerage XP noted that margins fell short of consensus on higher-than-expected lifting costs and difficulties in its gas and power business. read more

Brazil-listed preferred shares opened in the black, but were down 3.5% by the mid-afternoon. That was below the nation’s benchmark Bovespa equities index (.BVSP), which was off 2.4%, and well below the other oil and gas producers on the index, all of which were in positive territory.

Also of note during the call, the company’s sustainability head, Rafael Chaves, said that a litany of alternative energies – including wind, solar, nuclear and hydrogen – could form part of the company’s next five-year business plan.

For years, Petrobras had said it was laser-focused on oil and gas production, but in recent months executives have hinted at more openness to investing in sustainable energy.

Reporting by Gram Slattery and Marta Nogueira; Additional reporting by Roberto Samora in Sao Paulo; Editing by Mark Potter, Mark Porter and Marguerita Choy

reuters.com 02 24 2022