Canadian oil production falls to lowest second quarter level since 2017

The pandemic has dealt a blow to the Canadian oil industry.

Production of crude oil and equivalent products fell 11.3 percent in the second quarter of 2020 compared to the same period last year.

Statistics Canada reports that this was the lowest level since the second quarter of 2017.

“The decline was attributable to lower demand following COVID-19 lockdowns imposed by governments around the world and sharply lower crude oil prices,” the federal agency stated Friday (September 4).

Second quarter production totaled 59.9 million cubic metres.

“Production of refined petroleum products was also affected as lockdowns and travel restrictions reduced the need for transportation fuels,” Statistics Canada also noted.

Consumption of motor gasoline fell 30.1 percent during the second quarter of 2020; diesel fuel, 13.7 percent; and jet fuel, 81.1 percent.

For the month of June, production of crude oil and equivalent products fell 10.3 percent year over year to 20.1 million cubic metres or 126.6 million barrels.

Statistics Canada reported that this follows declines in April (-10.7 percent), and May (-12.9 percent).

“Despite a modest recovery in demand for crude oil attributable to the pick-up in economic activity, production was still limited by the recent voluntary cuts imposed by most producers in the wake of lower oil prices,” the agency stated.

Statistics Canada also reported that coal production was down 25.8 percent year over year to 9.3 million cubic metres in the second quarter.

This was the “lowest production level on record”.

“The decrease was largely attributable to the steady decline in the demand for coal, combined with mines closures due to COVID-19,” the federal agency reported.

For natural gas, “marketable production” fell 1.6 percent year over year to 1.7 billion gigajoules in the second quarter.

Deliveries to industrial consumers decreased by 3.5 percent “as economic activity slowed”.

“In contrast, deliveries of natural gas to residential consumers were up, with more people staying home as the pandemic unfolded,” Statistics Canada reported.

More details here.