Update on Canada Oil & Gas Supply - Oct 2

[dan_s]

From CIBC Equity Research

WCSB oil production increased marginally in August over July; however,
absolute growth in production is showing signs of weakness. As we close out
Q3/20, many operators are budgeting for 2021. While marginal increases are
possible for the next year, a widespread acceleration in spending seems
highly unlikely. The impact of maintenance-related outages and slower
activity is reflected in WCSB natural gas production, which has quietly fallen
to levels not seen since July 2017. While we suspect this is a temporary
reduction, this is also another data point supporting our view that natural gas
supply could be strained going into 2021.

Key Points
Oil production sequentially up, but growth rates weaker than last
month. August oil production in AB and SK increased by 63 Mbbl/d (3%)
and averaged 2.3 MMbbl/d during the month which is a more modest gain
than that witnessed in recent months. Recall that oil production increased by
159 Mbbl/d (+4%) from June to July.

Gas volumes have quietly softened since February. Raw natural gas
production for the WCSB was 17.0 Bcf/d in July, marking six consecutive
months of production declines. Since February, natural gas production has
fallen month over month by 0.2 Bcf/d on average.