Crude Oil Forecast

CAPP’s annual Crude Oil Forecast, Markets and Transportation report provides a long-term outlook for Canadian crude oil production. The 2019 edition of the report projects serious constraints over the forecast period from 2019 to 2035.

This constrained forecast is due to current cumulative regulatory and policy challenges and insufficient market access, which in turn are having and will continue to have negative impacts throughout Canada’s economy – from diminishing investment to loss of employment and reduced government tax and royalty revenues.

Global Energy Demand

The Canadian situation is in sharp contrast to growing energy demand and production elsewhere. By 2040, global oil demand is anticipated to increase to 106.3 million barrels per day (b/d). Across the Asia Pacific region, oil consumption and energy demand are growing significantly, and U.S. energy demand is robust.

Canada has an opportunity to gain global market share, replacing less sustainably produced oil sources. At the same time, a healthy Canadian industry with access to global markets ensures ongoing prosperity and economic benefits across the country.

However, the industry continues to face numerous challenges. If these challenges are not successfully addressed, any meaningful increase in oil production will not be achievable.

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Canadian Production

The report projects a constrained outlook for Canadian oil production from 2019 to 2035. Although production will increase by 1.27 million barrels per day (b/d) by 2035that growth rate is about 6% less than CAPP’s 2018 forecast.

Total annual production is expected to increase by an average of 3% until 2021, then slow to an average growth rate of 1% annually. Oil sands production is expected to reach 4.25 million b/d by 2035 from 2.9 million b/d in 2018 – a growth rate decline of 12% from last year’s forecast.

Market Access is Key

Canada has an opportunity to gain global market share, replacing less sustainably produced oil sources. At the same time, a healthy Canadian industry with access to global markets ensures ongoing prosperity and economic benefits across the country.

Major pipeline projects such as Northern Gateway and Energy East have been cancelled, and the Enbridge Line 3 Replacement project, the Trans Mountain Expansion project and TC Energy Keystone XL project continue to face challenges.

As a result, Canadian producers are faced with insufficient takeaway capacity for crude oil. This limits Canada’s ability to serve existing markets in Canada and the U.S., and prevents Canada from accessing emerging overseas markets.

Industry Competitiveness

Inefficient and duplicative regulations are diminishing the global competitiveness of Canada’s crude oil industry. The Canadian oil sands industry is set to post its fifth consecutive annual decline in investment. The continued regulatory and policy challenges create significant barriers to future investment, putting Canadian jobs at risk.

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2019 Production and Supply Data

Download Excel spreadsheets of the production and supply data from the Crude Oil Forecast.

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