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Iran Seizes Oil Tanker In Strait Of Hormuz

Iran Seizes Oil Tanker In Strait Of Hormuz

Iran reportedly seized a Liberian-flagged…

Canadian Crude Production Falls To 2016 Lows

Due to the price and demand crash in the second quarter, Canada’s oil production slumped to 4.4 million barrels per day (bpd) in May – the lowest output since the middle of 2016 when wildfires crippled oil sands production, the U.S. Energy Information Administration (EIA) said on Thursday.

In the first half of 2020, oil producers in Canada cut their production by 20 percent compared to the average 5.5 million bpd oil production in 2019 because of low demand for fuel in North America and low oil prices that had Canadian producers curtail output.  

Canada’s production of petroleum and other liquids averaged 5.6 million bpd in March, but after the oil price collapse – which saw the price of Western Canadian Select (WCS) slump into single digits in April – production in April dropped by 700,000 bpd to 4.9 million bpd. This decline was steeper than the monthly drop in 2016 when wildfires reduced Canadian production by 640,000 bpd in May 2016, due to shutdowns at some oil sands operations.

After the decline in April 2020, Canada’s oil production continued to drop in May—by another 560,000 bpd to 4.4 million bpd, the lowest production since mid-2016, the EIA has estimated.

In June, some producers brought part of their production back online as demand for oil products began to rise in Canada and its main energy export outlet, the United States. Overall, Canada’s oil production slightly rose in June from the lows in May, according to the EIA.

The curtailments in Canada were larger than the production cuts at some OPEC countries which are bound by the OPEC+ pact to reduce output in a bid to draw down the high inventory levels around the world. Among non-OPEC producers, Canada’s production declines were the third largest after Russia and the United States, the EIA said.

Canada and the U.S. are not part of the OPEC+ agreement.

EIA currently sees Canada’s oil production averaging 5.1 million bpd this year and 5.5 million bpd next year.

By Tsvetana Paraskova for Oilprice.com

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