Oil Daily | Canada's Oil Sands Output Hits Record High; US Crude Stocks Draw Significantly

【Global Oil Supply and Demand】

Canada's oil sands production is projected to reach a record high of 3.5 million barrels per day this year due to optimization and efficiency improvements, with production expected to continue rising. S&P Global Commodity Insights anticipates production to hit 3.9 million bpd by 2030, driven by favorable economics and low breakeven costs.

The American Petroleum Institute reported a significant draw in U.S. crude oil inventories, with a decline of 4.277 million barrels for the week ending June 20, following a massive decrease the previous week. Gasoline inventories rose, but distillate and Cushing inventories fell.

【Oil-Producing Countries Dynamics】

China and India have reduced imports of Indonesia's lower-grade thermal coal due to declining global coal prices, opting for higher-grade coal from Mongolia, Russia, and South Africa. India's increased domestic production also contributes to declining imports, while China boosts its coal imports from Mongolia and Russia.

The conflict between Israel and Iran has prompted China to reconsider its energy supply security, with renewed interest in Russia's Power of Siberia 2 pipeline. China's reliance on Iranian crude is under review, potentially increasing oil purchases from Russia, as instability in the Middle East raises concerns.

Nigeria's Economic and Financial Crimes Commission has arrested former oil officials for alleged fraud involving $7.2 billion. The arrests are part of President Bola Tinubu's efforts to eradicate corruption and boost Nigeria's oil production, amid oil theft and struggles to meet OPEC quotas.

Russia is considering using its excess natural gas, resulting from reduced pipeline exports to Europe, to power AI data centers or crypto mining operations. Yet, extraction costs challenge feasibility, prompting suggestions to use coal for data centers, saving gas for other industries.

【Latest Oil Policies】

The U.S. Senate parliamentarian has blocked provisions in the OBBB Act aimed at fast-tracking fossil fuel development by bypassing environmental reviews, requiring a 60-vote threshold for approval. The decision highlights the ongoing challenges in rewriting environmental laws under budget reconciliation.

【Industry News】

National governments in the EU may soon be allowed to subsidize companies facing high energy costs, following a potential amendment to the EU's no-subsidy rules. The Clean Industrial Deal State Aid Framework may include "temporary electricity price relief" to address energy transition costs and aid struggling industries.

The UK Climate Change Committee advises reducing energy costs to achieve climate goals, stressing that cheaper electricity is essential for adopting clean electric technologies. However, the financial sustainability of subsidies for wind, solar, EVs, and heat pumps is a concern, as high costs impact consumers.

Alberta exceeded its self-imposed natural gas flaring limits for two consecutive years, prompting the removal of the provincial limit. The move aligns with increased oil production and efforts to cut emissions, while Alberta seeks private investment for a new pipeline to British Columbia.

【Company News】

Alberta could soon receive a proposal for a new pipeline from the oil-rich province to British Columbia's northwest coast, aimed at increasing crude exports. The provincial government and Canadian policymakers are reconsidering pipeline projects to diversify exports beyond the U.S. amidst changing geopolitical dynamics.