Brazilian liquids output, ex-biofuels, fell m/m by 24 thousand b/d to 2.74 mb/d in October, and was up slightly y/y by 18 thousand b/d, with year-to-date growth at 0.16 mb/d. Crude output was flat y/y at 2.63 mb/d, as an unplanned outage at FPSO Cidade de Caraguatatuba continued, while maintenance impacted pre-salt Campos output at FPSO Cidade de Anchieta and the Baleia Azul and Pirambu fields. In November, the last of the four systems scheduled to achieve first oil in 2017 started up. The primary purpose of the 50 thousand b/d Libra Extended Well Test (EWT) project is to acquire technical data to understand how future phases of the field will be developed. Libra could eventually be developed with five FPSOs, although this is a post-2020 story. For 2018, we forecast 0.22 mb/d of y/y growth, driven by the pre-salt.
Brazilian oil demand rose y/y for a sixth consecutive month, up by 0.10 mb/d to 2.42 mb/d in October, led by diesel, which rose by 57 thousand b/d y/y, the strongest growth since September 2014. A large increase in truck traffic supported diesel demand, with heavy truck traffic on Brazilian toll roads higher y/y by 7.9% in October. Growth came primarily from the North region (up by 17% y/y), with industrial production rising by 13.3% y/y in Para State, the most populous state in region. However, gasoline demand continued to soften, falling by 17 thousand b/d y/y as ethanol took a larger share of sales. Fuel oil demand rose once again, up by 22 thousand b/d y/y as drought continues to plague Brazil, with reservoir levels at 18.7% full as of 30 November. Brazilian refinery runs softened in October by 44 thousand b/d m/m to 1.78 mb/d, lower y/y by 0.11 mb/d, as the Regap and Revap refineries were in planned turnarounds. Total oil product imports rose y/y by 0.26 mb/d, hitting 0.69 mb/d in October, led by stronger diesel imports.