March 24, 2011

President Obama Says US To Be Major Purchaser Of Brazilian Oil... UGH!!! >:/

The Telegraph UK
written by Robin Yapp, in Brasilia
Saturday March 19, 2011

President Barack Obama has pledged that the United States will be a "major customer" for Brazilian oil in the coming years amid continuing unrest in the Middle East.

Prices for Brent crude hit more than $117 last week as the civil war in Libya continued and are likely to rise further after the start of UN-backed action against Col Gaddafi's forces.

Traders are also concerned about protests and tensions in a number of other oil-producing nations in the region.

Mr Obama spoke of the US's desire to secure more of its oil from Brazil in future after talks with his counterpart, President Dilma Rousseff, in Brasilia at the start of a two-day visit to Latin America's biggest country. "I have told her that the United States wants to be a major customer, which can be a win-win for both our countries," he said.

Brazil possesses some of the world's biggest offshore oil reserves in the pre-salt area off its south-east coast. Ms Rousseff has stated her desire to export the vast majority of oil from the fields as the country concentrates on using renewable sources of energy such as hydroelectric power and ethanol for domestic needs.

Speaking in a newspaper interview just before Mr Obama's arrival, she made what seemed a clear sales pitch, asking “which other country in the world has the oil reserves that Brazil has, that is not at war, that does not have an ethnic conflict, which respects contracts, has clear democratic principles and vision, is generous and in favour of peace?”

Mike Froman, a senior White House adviser on international economic affairs, also spoke of a "natural potential strategic partnership"with Brazil.

Much of the money raised from deals to sell oil to the US and other countries could go towards infrastructure improvements as the 2014 World Cup and 2016 Olympics in Rio de Janeiro approach. Mr Obama's visit to Brasilia also saw the US sign an agreement to help Brazil in its preparations for the sporting events, which could see America training security teams and helping with planning and infrastructure challenges.

Many key works, especially at Brazil's creaking airports, are currently well behind schedule and US companies with experience of preparing for major events will hope the deal may also help them cash in.

Mr Obama's entourage includes Timothy Geithner, the US Treasury Secretary, and the two hope to win greater support from Brazil in exerting pressure on China to allow the yuan to appreciate.

Ms Rousseff is thought to share the US concerns about the value of the yuan giving Chinese exporters a competitive advantage.

But her country has also benefited from the huge demand in China for everything from iron ore to soy, which helped Brazil's trade with China rise 53pc to $56bn last year.

Mr Obama did not mention China in his remarks after meeting Ms Rousseff and many analysts are sceptical about the chances of Brazil trying to get tough with China. "Brazil isn’t going to tag-team with the United States and gang up on China,” said Christopher Garman, director for Latin America at Eurasia Group, a Washington-based political risk group. “But I think it’s going to be a more nuanced and balanced relationship.”

Mr Obama was due to arrive in Rio de Janeiro on Saturday night before going on to Chile on Monday and finally El Salvador before returning to Washington.

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