Canada’s oil production has remained largely stable, but the risk that wildfires pose to the industry is growing, Goldman Sachs said on Tuesday.
“Rising concerns over spreading Canada wildfires have not materialized into severe production disruptions yet, with our Canada production nowcast increasing in July, in line with our expectations,” the bank said in a note.
However, the worst of the wildfire season is likely yet to come, and a third of Alberta wildfires are burning out of control, threatening 0.4 million barrels per day of oilsands production, Goldman Sachs noted.
Suncor has been curtailing production in its over 200kb/d Firebag field for over two weeks, and other producers started to evacuate non-essential workers from the most affected fields, while keeping production stable so far.
Canadian authorities issued an evacuation order late on Monday for the Town of Jasper and Jasper National Park in the province of Alberta following wild fires.
Meanwhile, “as the oil market looked through rising tensions between Israel and Yemen and Biden’s exit from the election race, the risk premium remains nearly zero and the average July Brent price is at our inventory-based $85/bbl forecast,” analysts at Goldman Sachs said in a note. Both Brent crude futures and U.S. West Texas Intermediate crude for September fell by 39 cents to $82.01 a barrel and to $78.01 per barrel respectively by 1135 GMT, as growing expectations of a ceasefire in the war in Gaza weighed on prices.
(Reporting by Rahul Paswan in Bengaluru; Editing by Louise Heavens)