Extract from production:
We forecast that Canadian liquids production fell m/m by 63 thousand b/d to 4.89 mb/d in July, higher y/y by just 73 thousand b/d, the slowest rate of growth since August 2016. The m/m decrease was led by synthetic production falling by 0.16 mb/d m/m, due to the Mildred Lake outage, while bitumen output was lower by 48 thousand b/d m/m on both Mildred Lake and extended works at Jackfish. Conventional offshore output increased by 16 thousand b/d m/m to 0.26 mb/d as Hebron production ramped up. Canadian rail exports likely increased as apportionment remained at record levels, with no sight of weakening production.
Final data show total Canadian liquids production fell by 93 thousand b/d m/m to 4.95 mb/d in June, broadly in line with our forecast of a 0.11 mb/d m/m drop. Synthetic crude production increased by 92 thousand b/d m/m as upgraders exited planned maintenance, although non-upgraded bitumen output fell by 0.10 mb/d m/m, while conventional output and NGLs fell. Total crude exports to the US rose m/m by 21 thousand b/d to 3.57 mb/d in June. This was led by an increase in non-pipeline volumes, which were higher by 37 thousand b/d, while pipeline volumes fell by 15 thousand b/d m/m. Crude stocks fell by 2.64 mb in June, driven by slightly lower production, but have likely built since, given apportionment volumes and price action in Canadian crudes.
Extract from demand:
Canadian oil demand fell by 74 thousand b/d y/y to 2.36 mb/d in July led by LPG. Demand for gasoline and distillate rose modestly, despite inflationary pressures and reduced industrial activity. Oil demand fell despite employment growing by 1.3% y/y in July, largely driven by growth in full-time employment. Meanwhile, June’s demand was revised down by 72 thousand b/d to now show a y/y decline of 62 thousand b/d.