Market Snapshot: Fort McMurray wildfires lead to lower refinery utilization rates and higher crude oil imports
Release date: 2016-08-31
In May 2016 the Fort McMurray wildfires led to the lowest level of domestic crude oil use in Canadian refineries since April 1973. The loss of supply heavily impacted refinery operations in western Canada and resulted in lower refinery utilization rates in Ontario. It also led to an increase in crude oil imports to replace some of the lost domestic supplies. Alberta was the most heavily affected region, largely due to how difficult it is to import crude oil in the event of supply disruption.
In May 2016, refineries in western Canada operated at 43.9% compared to 83.1% the same month in 2015. Simiarly, in Ontario refineries in May 2016 operated at 59.3% compared to 89.1% last year.
Source and Description
Description: This line graph illustrates the percentage of utilization for refineries in Ontario and western Canada for the period January 2015 to July 2016. Refinery utilization rates are fairly constant through that period at around 80%. In May 2016, refinery utilization rates for Ontario and western Canada declined to 43.9% and 59.3%, respectively. By July, refinery utilization rates in Ontario and western Canada increased back to their normal range.
To make up for the loss of domestic crude oil supplies, imports of crude oil increased in May 2016 compared to the same month the previous year. In May 2016, Canada imported just over 680 thousand barrels per day (Mb/d) of crude oil, compared to 602 Mb/d in May 2015, a 13% increase.
With the restart of oil sands facilities in northern Alberta in June 2016, crude oil imports declined and refinery operations returned to more normal levels. Refinery runs in June in western Canada and Ontario were at 84.7% and 77.3%, respectively.
Gasoline prices in western Canada and Ontario rose moderately throughout May and June, reflecting the tight gasoline supply situation. Gasoline prices peaked in mid-June and have since declined and in western Canada, are well below the Canadian average price.
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