Vaccines seen as solution to lagging oil demand
Canada’s oil demand isn’t bouncing back like it is in the U.S. as the country fights to contain the coronavirus, the chief executive of Suncor Energy Inc. said.
Gasoline demand in Eastern Canada is 15 to 20 per cent below normal and is down five to 10 per cent in Western Canada, said Mark Little, the head of Canada’s biggest oil sands producer, a company which also operates refineries in Quebec, Ontario, Alberta and in the U.S. state of Colorado.
“In Canada, the lockdowns continue to get more and more severe,” he said in an interview Tuesday. “We are really focused on trying to figure out how we can promote vaccine in Canada.”
While a swift recovery in demand in places like the U.S., China, and the U.K. is underpinning a comeback in global oil markets, Canadian provinces are tightening lockdowns amid surging cases and a more sluggish vaccine rollout. Ontario is halfway through a month-long stay-home order that is expected to be extended. In Alberta, the worst affected province, schools are closed and restaurants can only serve food outdoors or as takeout.
The situation isn’t just affecting demand but also oil production in a country that provides more than a quarter of the crude oil the U.S. consumes. A massive outbreak in Northern Alberta has infected thousands of oil sands workers just as additional workers are flying into the region to perform maintenance on machinery.
The pandemic combined with a tight labor market contributed to Suncor’s decision to delay maintenance on its largest oil sands upgrader to June from May. That work could be delayed even further, Little said.
“We are planning to do it in June but if we need to, we will push it further,” he said. “We need to stay flexible.”