Canada increases oil, natural gas output amid market uncertainty

Canada increased its crude oil and natural gas production in March to meet domestic and global demand amid market uncertainty caused by the conflict in Ukraine and sanctions imposed on Russia, Statistics Canada announced Tuesday.

Production of crude oil and equivalent products was up 2.3 percent to 24.2 million cubic meters in March, a second consecutive monthly year-over-year gain and the overall increase was driven by oil sands extraction, up 1.8 percent in March to 15.7 million cubic meters, the national statistical agency said.

Prices for energy products continued on a strong upward trend in 2022. In March, according to the Raw Material Price Index, the price for crude oil and bitumen jumped 21 percent compared with February 2022, and 79.8 percent higher compared with March 2021, as the conflict in Ukraine and sanctions imposed on Russia caused major disruptions in energy markets, the agency said.

According to the agency, exports of crude oil and equivalent products rose 5.5 percent to 19.1 million cubic meters and imports rose 17.5 percent to 3.7 million cubic meters in March.

Meanwhile, production of marketable natural gas in Canada increased 7.2 percent year over year in March to 639.0 million gigajoules, the highest monthly production level recorded since the beginning of this series in January 2016, and the 12th consecutive month of year-over-year production increases, the agency said.

Inventories of natural gas held in Canadian facilities fell 23.4 percent year over year to 428.4 million gigajoules in March. This was the lowest inventory level since the start of the series in January 2016, due in large part to strong demand for heating and industry over the winter months of 2022 as well as increased demand in the United States, the agency said, adding that inventories generally began to be restocked in April.

According to the natural gas price index, Canadians were paying 27.9 percent more for natural gas in March compared with the same month in 2021. Prices were up 3.4 percent compared with February 2022, Statistics Canada said.