Extract from production:
We forecast that Canadian liquids production decreased m/m by 0.11 mb/d to 4.93 mb/d in June, higher y/y by 0.41 mb/d. Synthetic production fell slightly, by 33 thousand b/d m/m, due to the Mildred Lake outage, while bitumen output was lower by 72 thousand b/d m/m on both Mildred Lake and the extended maintenance at Jackfish. Conventional offshore output fell by 17 thousand b/d m/m to 0.24 mb/d. We expect Canadian rail exports to have remained flat m/m in June after a train derailment on the BNSF line slowed movements. We forecast Canadian crude stocks to have fallen in June as refinery runs ramped up and output eased.
Final data show total Canadian crude stocks built by a massive 7.7 mb in May driven by higher production, which grew by 0.20 mb/d m/m to 4.1 mb/d (vs our forecast of 0.15 mb/d). Synthetic crude led the increase, adding 0.13 mb/d m/m, as upgraders began to exit planned maintenance. Bitumen output was also up, by 85 thousand b/d m/m. Total crude exports to the US were down m/m by 23 thousand b/d to 3.55 mb/d in May. Pipeline volumes were higher by 50 thousand b/d while non-pipeline volumes fell by 73 thousand b/d to 0.32 mb/d.
Extract from demand:
Canadian oil demand increased by 10 thousand b/d y/y to 2.39 mb/d in June, supported by manufacturing sales and employment improving, though demand for the four main products fell by 5 thousand b/d y/y with only fuel oil recording gains. Still, preliminary Canada demand data is susceptible to significant revisions, so the final picture may look notably different. Indeed, demand estimates for May were revised higher, with demand now up y/y by 24 thousand b/d compared with the 36 thousand b/d decline shown in the initial estimates.