Extract from production:
We forecast that Canadian liquids production in December fell by 85 thousand b/d m/m to 5.36 mb/d (+0.14 mb/d y/y), led by a 43 thousand b/d m/m fall in NGLs production. The decrease in crude (-42 thousand b/d m/m) was driven by falling bitumen (-55 thousand b/d) and synthetic (-45 thousand b/d) production. In situ production was higher by 55 thousand b/d driven by Cenovus’ Christina Lake, though this was more than offset by a 0.11 mb/d m/m fall in mined production, pulling bitumen lower. Conventional production recovered m/m by 53 thousand b/d as platforms on the east coast returned after being knocked offline due to bad weather, although repair work kept the Sea Rose platform offline until the end of January.
Final data for November show total Canadian liquids production increased by 93 thousand b/d m/m to 5.45 mb/d (+0.34 mb/d y/y), in line with our estimate of an 89 thousand b/d m/m increase. The lift came thanks to higher synthetic crude (+0.13 mb/d m/m) and NGLs output (+37 thousand b/d m/m) overwhelming a drop in bitumen output (-62 thousand b/d m/m). Suncor reported that Mildred Lake was performing well after its mid-2018 outage, with Q4 18 average production of 0.36 mb/d, and that it achieved 101% of nameplate at its Base Plant facility. Lower bitumen production was due to planned cutbacks already in place in response to record low Canadian price differentials from late Q3 18, prior to the Albertan government’s cuts mandate. Conventional output fell by 15 thousand b/d m/m as an increase from Hibernia was more than offset by declines across North Amethyst, White Rose and Terra Nova due to adverse weather.
Extract from demand:
December Canadian demand totalled 2.36 mb/d, lower y/y by 45 thousand b/d, with full-year demand flat y/y at 2.38 mb/d. November demand was revised lower by 36 thousand b/d to now show a drop of 11 thousand b/d.
Gasoline demand increased by 30 thousand b/d y/y to 0.83 mb/d, with falling oil prices resulting in an 8.6% y/y decline to the gasoline component of the Consumer Price Index (CPI). The unemployment rate was unchanged m/m at 5.6% (lowest rate since January 1976), as the level of employment remained steady in December. Manufacturing, transportation and warehousing all recorded increases in employment numbers, but the gains were offset by losses in wholesale, retail trade and public administration sectors. In 2018 employment grew by 0.9%, a slower pace when compared to 2016 and 2017, possibly indicating an economic cycle in transition.