Market Snapshot: Canada’s oil exports started to recover from COVID-19 in June and July 2020
Release date: 2020-12-16
After reaching an all-time high of 4.09 million barrels per day (MMb/d) in February 2020, Canadian crude oil exports dropped almost three-quarters of a million barrels per day to 3.34 MMb/d in May 2020; the lowest level in three years. Exports started to rebound in June at 3.39 MMb/d, as United States (U.S.) and Canadian refinery demand began to recover, and continued in July, reaching 3.62 MMb/d.
Figure 1. Canadian Crude Oil Exports 2015-2020
Source and Description
Description: This chart shows Canada’s total oil exports (blue line), heavy oil exports (dark grey) and light crude oil (light grey) in thousand barrels per day (Mb/d) from January 2015 to July 2020. In May 2020 Canadian oil reached a three year low at 3.34 MMb/d, before recovering to 3.62 MMb/d in July. Heavy oil accounted for most of the drop in oil exports.
The lockdowns and travel bans enacted to contain the spread of COVID-19 in the first half of 2020 reduced demand for crude oil in Canada, the U.S., and the rest of the world, which, when combined with excess oil supply, caused a global glut in crude oil. West Texas Intermediate (WTI) prices fell to US$16.55 per barrel in April 2020, the lowest level in twenty years, triggering widespread oil production cuts in Western Canada, the U.S., and other producing countries. As a result of production cuts and weak demand, Canadian oil exports plunged to a level not seen since November 2017, when exports were 3.21 MM b/d.
Heavy oil accounted for most of the decline in exports, because Canadian producers mostly trimmed oil sands production, which has higher costs when compared to conventional production.
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