Brazilian liquids production fell in October by 25 thousand b/d y/y to 2.71 mb/d, despite increasing m/m by 0.14 mb/d m/m after four months of m/m declines. Crude output fell by 13 thousand b/d y/y (+0.13 mb/d m/m) to 2.61 mb/d, the highest level since May 2018. The sharp m/m recovery came as the Jubarte, Roncador and Albacora fields in the Campos basin returned from maintenance, helping Campos basin output rise by 97 thousand b/d m/m to 1.1 mb/d. However, this was still lower y/y by 0.14 mb/d as underlying declines remained high. Meanwhile, pre-salt output was supported by the startup of the P-69 platform at Lula Sul, which came online late in the month. As a result, production at the Santos basin increased by 0.16 mb/d y/y to 1.3 mb/d. In November the Buzios P-75 platform produced first oil and over the coming months, P-67, P-76, P-77 and P-68 are scheduled to startup, adding 0.65 mb/d of new capacity. Together with the ramp-up of 0.59 mb/d of capacity that came online this year, this supports our forecast of 0.3 mb/d 2019 y/y growth in crude supply, offsetting a 15% decline in the Campos basin.
Brazil’s oil demand increased by 21 thousand b/d y/y to 2.4 mb/d in October, as distillate demand rose by 30 thousand b/d y/y to 1.0 mb/d. Gasoline demand fell by 99 thousand b/d y/y to 0.62 mb/d, while ethanol rose by 0.13 mb/d y/y to 0.41 mb/d. Refinery runs fell by 9 thousand b/d y/y to 1.77 mb/d, as Petrobras continues to recover from an explosion at the Replan refinery on 20 August, although the fire at the Rnest coker in early December that shut the entire refinery will weigh on runs again. Distillate imports fell by 46 thousand b/d y/y to 0.23 mb/d, but distillate imports should remain at healthy levels with the new outage at Rnest and until the Replan refinery returns to normal operations, expected February 2019.