Brazil's disappointing performance in liquids production continued, with July's output totalling 2.116 mb/d, the second lowest for the year. This constituted a y/y decline of 46 thousand b/d, following a y/y decline of 101 thousand b/d in June. Crude oil output remained weak, and at 2.023 mb/d, it remained on a par with the lowest output for the year, seen in April, and the weakest going back to November 2010. Maintenance work on the P-8 platform in Brazil's Campos Basin, where more than 85% of the country's crude is produced, was responsible for part of the drop in output. Output from offshore subsalt fields continued to increase, rising by 9% m/m. However, steep decline rates at Brazil's existing oilfields have been a drag on the country's supplies, together with delays in new projects coming online due to rising costs and technical problems. With maintenance scheduled at the giant Roncador and Marlim Leste fields in the Campos Basin in August, we would expect Brazil's output to remain low for another month.
Meanwhile, Brazil's biofuel production has recovered somewhat following the disappointing harvest of sugarcane crops last year, but still remained around 17 thousand b/d lower y/y. As a result, gasoline demand remained high, rising by 13.8% y/y. In the year-to-date, gasoline demand is running higher y/y by 12.8%. Diesel demand also remained strong, coming in at the third highest levels ever (966 thousand b/d), higher y/y by 5.4%, with the year-to-date average up by 6.5%. Total demand came in at 2.194 mb/d in July, higher y/y by 4.4%.