Oil: Significant loss of Canadian output is likely to lower US oil imports – Standard Chartered

According to the analysts at Standard Chartered, the oil market is now belatedly paying some attention to a significant outage in Canada which is likely to reduce US imports further, adding to the downward pressure on inventories during Q2

Key Quotes

“Oil market headlines have been dominated in recent weeks by relatively small and often very transient changes in Libya’s output. Other more significant output swings have occasionally been lost amid the concentration on Libya. However, we think that the market is now belatedly paying some attention to a significant outage in Canada. On 14 March a fire damaged the upgrader at Syncrude’s Mildred Lake facility, some 40 miles north of Fort McMurray. The fire has taken down 350 thousand barrels per day (kb/d) of synthetic oil production. An additional 100kb/d of bitumen output has been shut in at three other operations that relied on Lake Mildred output for use in blending.”

“Restoration of output is due to start in May, and is likely to be completed in June. We think that the cumulative loss of output is likely to be close to 25 mb, assuming the restoration schedule does not slip. The outage is likely to reduce US imports further, adding to the downward pressure on inventories during Q2.”