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Canada oil sands maintenance may cut crude supply to U.S. refiners

Rystad Energy estimates Canadian crude output could fall by 300,000 barrels per day in September, while U.S. inventories are at their lowest level in 12 months, limiting the usual buffer from storage.

Reported · Written up by our desk · Energy

U.S. refineries have been running at full speed to make up for lost fuel supply from the Middle East, and U.S. fuel exports have been setting records, but the near-term outlook could change due to seasonal disruptions in Canada, according to OilPrice.

During oil sands maintenance season, Canadian crude production may drop by 300,000 barrels daily in September because of maintenance activities, Rystad Energy estimated, as cited by the outlet. The impact could be amplified because crude in storage is reportedly lower than normal, the lowest in 12 months, reducing the ability to offset the supply gap with storage barrels.

Normally, Canadian producers send about 4 million barrels daily of heavy crude to U.S. refiners, but next month there will be less. While shipments from Venezuela are increasing, OilPrice notes they are not ramping up fast enough to fully replace the Canadian heavy crude, with demand for fuels still supported despite some demand destruction from higher prices.

Pipeline operators have stopped rationing space on their pipes, in evidence they expect lower demand in September, OilPrice said, citing the Bloomberg-referenced setup that major oil sands operators are cutting production for maintenance.

Latest closeWTI crude $82.40 ▲1.4%

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