The oil price and demand crash in April resulted in Canada’s energy exports plunging by the most on record, with crude oil exports plummeting by 55.1 percent, Statistics Canada said on Thursday, reporting the lowest levels in total merchandise trade in a decade.
As the coronavirus pandemic and the lockdowns to contain it crushed demand for oil in Canada’s key export market, the United States, exports of energy products plunged by US$2.66 billion (C$3.6 billion), the largest decrease on record, which was mostly due to the plunge in crude oil exports.
“Reduced demand for energy products in April due to confinement measures resulted in a drastic decrease in crude oil export prices, as well as lower export volumes,” Canada’s statistics office said today.
The price of Western Canadian Select (WCS), the benchmark price of oil from Canada’s oil sands delivered at Hardisty, Alberta, typically tracks the trend in prices of WTI Crude, which plunged in April and hit a negative $-37 a barrel on April 20, a day before the May contract expired.
“Despite the recent increase in market prices, crude oil export prices are likely to remain low in May, as crude oil price fluctuations are generally observed in export data with a certain delay,” Statistics Canada said today.
Canada’s crude oil imports also slumped in April, by 61 percent, due to weak demand and the partial or complete closure of a number of Canadian refineries that import crude oil.
Energy trade was the second-largest contributor to Canada’s worst trade data in a decade, while the biggest decrease in imports and exports was registered in the automotive sector because of factory shutdowns, according to Statistics Canada data.
Over the past two months, low crude oil prices have forced many Canadian companies to cut dividends and curtail heavy oil production in view of the unsustainably low prices for their oil.
By Tsvetana Paraskova for Oilprice.com
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