• 6 days Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO
  • 10 minutes America Could Go Fully Electric Right Now
  • 8 days Majors Oil COs diversify into Renewables ? What synergies forget have with Solar Panels and Wind Tirbines ? None !
  • 3 hours Most ridiculous green proposal
  • 4 hours The Green Hydrogen Problem That No One Is Talking About
  • 18 hours China Sets Its Sights On Global [EV, AI, CRISPR, Fusion, Navel Lint Collector] Dominance
  • 11 mins Rethinking election outcomes for oil.
  • 12 hours The City of Sturgis Update on the Motorcycle Rally held there, and the MSM's reporting hence
  • 5 hours Biden's laptop
  • 1 hour QUESTION: With worldwide 1.4 Billion passenger vehicles and 360 Million commercial vehicles using combustion engines how long before gasoline and distillates measurably decline. .
  • 5 hours Video Evidence that the CCP controls Joe Biden
  • 2 days Republicans Have Become the Party of Hate
  • 1 hour P@A will cost Texas Taxpayers $117 Billion.
  • 5 hours Making diamonds from thin air
  • 2 days Australia’s Commodities Heartland Set for Major Hydrogen Plant
Oil Investments Are Drying Up As Crude Demand Falters

Oil Investments Are Drying Up As Crude Demand Falters

The COVID-19-induced shortage in key…

The U.S. Has A Major EV Problem

The U.S. Has A Major EV Problem

Insufficient public charging infrastructure is…

The Oil Price Collapse Has Crushed Canada’s Crude Production

More than 1 million barrels per day (bpd) of curtailed crude oil production in Canada and lower demand in the pandemic have resulted in a rare occurrence in Canada’s pipeline takeaway capacity in recent years—there is space available on the few pipelines taking Canada’s crude oil to the United States. 

 

Canada’s persistent problem with not enough oil pipelines to carry the heavy crude oil out of Alberta to the international markets, mostly the U.S., looks solved, at least for now, “but for all the wrong reasons,” Kevin Birn, IHS Markit’s director of North American crude oil markets, told Bloomberg.

 

According to industry analysts and officials, Canadian oil producers have curtailed crude production by more than 1 million bpd since oil prices collapsed because of the pandemic and the Saudi-Russian oil price war in March.

 

Oil production shut-ins could reach 1.1 million bpd this summer, ATB Economics said at the end of April, expecting Canada’s oil production to slump by 14 percent compared to the over 3.5-million-bpd output in 2019. That is, if things with the pandemic, demand, and oil prices improve by the fall, ATB Economics said. 

 

With production down, there was unused space on Enbridge’s Mainline pipeline system, while Canada’s crude-by-rail exports plunged in April.

 

Enbridge’s Mainline—the largest pipeline network in North America—is running with unused capacity, Vern Yu, Enbridge’s executive vice president of liquids pipelines, told Reuters in an interview in April.

 

Data from Canada Energy Regulator shows that Canadian crude-by-rail exports plunged in April to 156,242 bpd, down from 350,567 bpd in March and a record 411,991 bpd in February. Over the past two years, Canada’s crude-by-rail exports increased as production grew amid flat pipeline capacity.

 

However, the COVID-19 pandemic and the oil price collapse upended the industry so much that Canada doesn’t have an oil pipeline shortage anymore. Considering the fact that curtailed production is not expected to come online very fast, Canada could have at least one of the three planned pipelines in operation before volumes return. 

 

The problem with the pipeline shortage is solved, just not the way Canada’s oil industry had hoped.  


By Charles Kennedy for Oilprice.com 

More Top Reads From Oilprice.com:

 



Join the discussion | Back to homepage



Leave a comment
  • Bob Forbes on June 23 2020 said:
    The industry is about to have its biggest boom ever. $100 to $150 will be the new norm. And no renewables will never cut it unless we all want to go back to living the way they lived hundreds of years ago. The world runs on oil and always will. The harder you suppress prices, the harder they rebound. Great times ahead for us oilers.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News