Brazilian liquids production fell, both m/m (-55 thousand b/d) and y/y (42 thousand b/d), for the fourth consecutive month in August, to 2.63 mb/d. Maintenance at FPSO Cidade de Angra dos Reis and FPSO Cidade de Maricá reduced output from the Lula field m/m by 77 thousand b/d to 0.8 mb/d. As a result, pre-salt output fell to 1.37 mb/d in August, from 1.45 mb/d in July. In the Campos basin, maintenance at P-25 and P-31 in the Albacora field also weighed, offsetting growth from the Tartaruga Verde field which has ramped-up to 24 thousand b/d since producing first oil in June. In the year-to-August, crude and NGL supply is lower y/y by 33 thousand b/d. Given no new systems are expected to come online in Q4 18, Brazil is likely to register y/y declines across 2018. We presently forecast a y/y gain of 0.24 mb/d across 2019.
Brazilian oil demand increased to 2.51 mb/d (+49 thousand b/d y/y) in August, even as gasoline demand continued to plummet on a clear preference for ethanol utilisation in light vehicles. Gasoline demand fell (-0.10 mb/d y/y) to 0.65 mb/d, while ethanol demand rose (+0.12 mb/d y/y) to 0.37 mb/d. Distillate demand, at 1.05 mb/d gained (+39 thousand b/d) for the 14th time in the last 16 months. Refinery runs increased by 27 thousand b/d y/y but fell by 0.12 mb/d m/m to 1.7 mb/d due to an outage at Replan that began on 20 August. Full operations at the refinery could return by 15 October, at which point crude throughputs should return to 1.85 mb/d and exports should fall back. Gasoline production fell by 68 thousand b/d m/m to 0.39 mb/d but exports were still 19 thousand b/d lower m/m due to weak demand. Distillate production increased by 60 thousand b/d y/y to 0.74 mb/d but fell by 59 thousand b/d m/m, forcing Brazil to increase imports to 0.15 mb/d. Having plunged by 1 mb/d in July, crude stocks built marginally in August.