CALGARY – A report by Barclays says Canada’s crude oil production last month is estimated to be the lowest it has been in almost two years.
While companies have yet to release production numbers, the British bank says wildfires and upgrader maintenance in Alberta are expected to have cut average national production to 3.98 million barrels of oil a day in May after peaking at an average of 4.59 million barrels a day in January.
“We expect Canadian crude production in May to be the lowest in nearly two years as a perfect storm of events curtails output,” wrote Barclays analyst Michael Cohen.
On May 23, a wildfire near Cold Lake in Alberta forced the shut down of an estimated 233,000 barrels a day of production from Cenovus Energy’s Foster Creek project and Canadian Natural Resources’ Primrose and Kirby South operations.
As of Monday that production was still offline, with the fire spanning 31,000 hectares and still classified as out of control.
Canadian Natural Resources, however, reported late Monday that officials had deemed the area safe enough for a team from the company to reach its operations and begin to assess the damage. The risk of new fires starting in the area has also been downgraded from extreme to moderate.
Looking at more long-term production, Barclays estimates that since oil prices dropped, producers have delayed a million barrels a day worth of projects that were expected online by 2030. Roughly 300,000 barrels a day of that production was expected to be online by 2020, but the bank now thinks that only 200,000 barrels a day of new production will be ready.
The bank expects Canada’s production to be back above 4.5 million barrels a day by the end of the year as new projects come online.