Extract from production:
We forecast that Canadian liquids production in October was higher m/m by 0.22 mb/d at 5.30 mb/d (+0.52 mb/d y/y). The increase was driven by synthetic production, which grew m/m by 0.22 mb/d driven by CNRL’s Horizon upgrader returning from maintenance, which had curtailed September output. Conventional production also ticked up m/m, as Hibernia’s production rose by 48 thousand b/d following its return from maintenance in September. Bitumen was the only exception, with output down by 28 thousand b/d m/m due to lower SAGD operations at Cenovous’s Christina Lake and Foster Creek as well as the Athabasca fields of Conoco Phillips and Suncor. These losses were only partially offset by a rebound in production at Husky’s Tucker Lake and Nexen’s Long Lake facilities. Jackfish production has been steadily increasing since July maintenance and is now producing just 8 thousand b/d below its March high of 0.12 mb/d.
Final data show total Canadian liquids production decreased by 0.39 mb/d m/m to 5.08 mb/d in September (+0.30 mb/d y/y), versus our estimate of a 0.34 mb/d m/m fall. This was after a 0.29 mb/d m/m increase in August. Decreases were across the crude streams, with bitumen output down by 46 thousand b/d m/m, lower at Husky’s Tucker Lake facility as well as CNRL and Imperial’s production in Cold Lake. Synthetic crude output slumped by 0.24 mb/d m/m as the CNRL Horizon’s upgrader was taken down at the start of the month for a scheduled 21-day outage followed by reduced rates expected to last a further 12 days. Total crude exports to the US fell by 34 thousand b/d m/m to 3.45 mb/d in September, higher y/y by 0.19 mb/d. Stocks fell by 5.3 mb m/m to 120.4 mb, as output eased from record levels in August.
Extract from demand:
Canadian oil demand rose by 5 thousand b/d y/y to 2.47 mb/d in October, led by gasoline (+69 thousand b/d) and distillate (+51 thousand b/d y/y), although demand is likely to be revised as LPG numbers are updated. September oil demand was revised lower by 60 thousand b/d to 2.47 mb/d, driven by downward revisions in gasoline (-21 thousand b/d), distillate (-19 thousand b/d) and residual fuel oil (-32 thousand b/d).
Canadian gasoline demand increased by 69 thousand b/d y/y to 0.88 mb/d in October, despite gasoline prices rising by 12% y/y, driving the transportation component of the CPI index higher by 4.3% y/y. However, this was offset by a healthy employment sector that continues to provide a tailwind to gasoline demand—the unemployment rate fell by 0.1 ppts m/m to 5.8%, approaching the lowest level since 1976. The number of employed people in Canada has increased by 1.1% y/y to 206,000 people, with 84% of the workers classified as full-time.