The Rising Influence of Rising Affluence

[DewDiligence]

More reasons to avoid PBR at any price; (see #msg-51214642 for background):

http://online.wsj.com/article/SB10001424127887324260204578587720789476286.html

Dominating the energy landscape in Latin America's largest economy and controlling the world's biggest offshore discovery in decades, Petróleo Brasileiro should be seeing a bright future. But surging local fuel demand, spurred in part by tight state control of domestic prices, is savaging the company's earnings.

What's more, Brazil's sudden crisis will increase the pain.

Petrobras must pay global prices in U.S. dollars for fuel imports but sell domestically in local currency at artificially low prices. In the last two years alone, after-tax losses in the company's domestic refining and marketing operations were $17.4 billion [!].

…Dollar-denominated investors in Petrobras suffered the worst returns of any large, integrated oil company in 2011 and 2012—and are on track to make it three years in a row.