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Extract from production:
We forecast that Canadian liquids production in March remained roughly flat, up by 17 thousand b/d m/m and just 30 thousand b/d y/y, with only minor changes across the complex. In situ production was up by just 2 thousand b/d m/m, with no noteworthy changes across individual fields. Synthetic production also likely came in slightly lower m/m, down by 4 thousand b/d, as maintenance began in the latter half of the month at Scotford and Base Plant.
Final data for February show total Canadian liquids production was up m/m by 4 thousand b/d to 5.23 mb/d (+19 thousand b/d y/y), in line with our forecasts of a 5 thousand b/d m/m decline. Bitumen production rose by 82 thousand b/d m/m after mandated production cuts were eased in Alberta by 75 thousand b/d for February and March, and by another 25 thousand b/d each month in April, May and June. Higher bitumen production was offset by a fall in all other liquids. Synthetic production was down by 42 thousand b/d to 1.17 mb/d, with conventional down by just 3 thousand b/d to 1.4 mb/d. NGLs were also lower m/m by 33 thousand b/d. According to the AER, Alberta stocks were up by 3.5 mb as stronger differentials made 0.2 mb/d of crude-by-rail movements uneconomical. Exports to the US were lower by a similar 0.3 mb/d m/m in February, with the largest declines seen to the USGC, including a reduction of 0.11 mb/d of rail to PADD 3, according to EIA figures. With the curtailments expected to fall further in H2 19 and the tightness in railcars easing from June, rail movements should pick up. But the 3.7 billion CAD, 4,400 railcar arrangement between Alberta and CN and CP may be at risk with a new administration elected last month which opposes the deal.
Extract from demand:
Canadian demand fell by 51 thousand b/d y/y to 2.09 mb/d in March, led by 'other oils’. The figure is likely to be revised higher as all other parts of the barrel clocked y/y increases (collective increase across the five main products at 0.23 mb/d), with gasoline demand rising by the most since October 2018. Even LPG demand rose y/y, the first increase in five months.
Canadian gasoline demand increased by 77 thousand b/d y/y to 0.82 mb/d, as energy prices decreased by 1.2% y/y in March. The CPI index increased by 1.9% y/y (+2.2% y/y excluding energy), with the transportation index being the major contributor to the rise. The rate of energy price declines slowed in March due to higher global oil prices, which led to a 11.6% m/m increase in the Canadian gasoline index. The unemployment rate was unchanged in March at 5.8% as the number of people searching for work held steady.
