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Brazilian total liquids production rose y/y by 0.48 mb/d to 3.10 mb/d in August. Crude output hit a record high, rising by 0.22 mb/d m/m to 2.99 mb/d as pre-salt production continued to increase. Both the Lula and Buzios fields hit record highs in August, producing 1.03 mb/d (+98 thousand b/d m/m) and 0.34 mb/d (+50 thousand b/d m/m) respectively. The 0.15 mb/d Buzios P-75 unit, which started producing in Q4 18, hit 0.12 mb/d in August (+44 thousand b/d m/m). Elsewhere, post-salt output rose by 19 thousand b/d m/m but was 86 thousand b/d lower y/y. We forecast crude output in Q4 19 will be higher y/y by 0.35 mb/d, boosted by the start of the 0.15 mb/d P-68 unit in the Santos basin. Brazil’s crude exports rose y/y by 0.12 mb/d to 1.07 mb/d in August and are likely to have risen further in September on higher crude output. Exports to China rose by 0.22 mb/d y/y in August, while exports to the US fell by 79 thousand b/d y/y.
Brazilian oil demand fell by 10 thousand b/d y/y to 2.50 mb/d in August, led by fuel oil (-36 thousand b/d). Diesel demand rose by 17 thousand b/d to 1.07 mb/d—the highest level since October 2014—following a y/y rise in the number of new trucks registered in July (+36%) and August (+27%), while combined ethanol and gasoline demand rose by 21 thousand b/d. Gasoline demand y/y growth was higher than ethanol’s for the first time in two years, albeit on a low base, and was supported by a 1% m/m fall in domestic gasoline prices. Refinery runs rose y/y by 97 thousand b/d to 1.83 mb/d, the highest level since July 2018, ahead of planned works at the Replan refinery. We expect refinery runs to have remained high in September. Total product imports fell by 42 thousand b/d y/y, led by naphtha (-45 thousand b/d y/y) while total products output rose by 75 thousand b/d y/y, led by gasoline (+57 thousand b/d y/y).