Canada’s oil sands spring maintenance to exacerbate global supply disruption (NYSE:SU)
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Annual maintenance work at Alberta’s oil sands will shutter 250K bbl/day, or ~5% of Canadian crude production, during Q2, Tudor Pickering Holt analysts estimate.
This year’s annual spring maintenance season is ramping up just as global oil prices have spiked following Russia’s invasion of Ukraine, and Canadian industry players say the outages will tighten oil supply balances even further.
Suncor (SU +1.1%) CEO Mark Little said this week that there may be scope for minor adjustments to turnaround schedules but facilities cannot avoid essential maintenance, as “no one is going to put their assets at risk from an integrity perspective.”
Suncor, Shell (SHEL -0.4%), Cenovus Energy (CVE +0.2%), Canadian Natural Resources (CNQ +3.2%) and MEG Energy (OTCPK:MEGEF -0.2%) all have disclosed details of maintenance planned for Q2, and Imperial Oil (IMO -2%) has said it is moving to annual spring maintenance at its Kearl oil sands mine, but has not released further details.
According to Reuters, traders say a supply crunch for synthetic crude will intensify in May, when both Canadian Natural’s Horizon upgrader and Suncor’s U2 upgrader start maintenance.
Suncor CEO Little has said Canada could provide about a third of the 700K bbl/day the US will need to replace banned Russian oil.