Extract from production:
We forecast that total Canadian liquids production fell by 67 thousand b/d m/m to 5.05 mb/d in February, still higher y/y by 37 thousand b/d, although this would be the slowest growth in 18 months. The m/m slip was led by a 71 thousand mb/d decline in synthetics output due to continued unplanned outages at Suncor and Mildred Lake. Non-upgraded bitumen production slipped by 4 thousand b/d m/m even as less oil was sent to upgraders. This is due to in-situ production falling by 16 thousand b/d m/m, led by Cenovus Christina Lake and Foster Creek. Conventional offshore output was up by 22 thousand b/d m/m to 0.23 mb/d as White Rose and Hibernia output increased by 8 thousand b/d and 7 thousand b/d m/m respectively. We expect Canadian rail exports to have been flat m/m, as production outages have eased the pressure of full pipelines, even though rail arbs to the Gulf Coast remain open. We expect Canadian crude stocks to have drawn modestly in February on these production outages before building in March and April on Edmonton’s refinery works, which totals 0.25 mb/d at its peak, although upgrader maintenance will partially offset this, especially as refineries in Western Canada run some 0.4 mb/d of synthetic crude.
Final data show total Canadian crude stocks drew by 4.4 mb in January, reversing the stockbuild seen in Q4 17. The draw was driven by Canadian liquids output declining by 0.12 mb/d m/m to 5.11 mb/d (in line with our forecast of a 0.12 mb/d fall), leaving output 0.12 mb/d higher y/y. The m/m decline was driven by much lower synthetic output (-0.14 mb/d), as volumes from Suncor were reduced due to unplanned power outages, likely due to cold weather. However, bitumen output was up by 31 thousand b/d m/m as less was sent to upgraders. In-situ output fell by 29 thousand b/d m/m, driven by lower output at Suncor Firebag. Total crude exports to the US were up m/m by 0.13 mb/d to 3.4 mb/d in January, with pipeline volumes up by 0.19 thousand b/d to 3.1 mb/d, while non-pipeline volumes increased by 57 thousand b/d to 0.3 mb/d.
Extract from demand:
Canadian oil demand rose by 21 thousand b/d y/y to 2.26 mb/d in February, with demand for the four main products 0.10 mb/d higher y/y. Additionally, as expected, January demand was revised significantly higher to show a more modest decline of 54 thousand b/d y/y compared with the initial 0.15 mb/d estimate. With February LPG demand highly likely to be revised up from the 78 thousand b/d y/y decline currently shown, overall demand growth should come in notably stronger.