Canada’s exports of energy products fell 7.3 percent in value in May, largely due to lower prices but also lower oil volumes, official data showed Thursday.
The energy sector, along with agricultural, fishery and intermediate food products, had the biggest impact on the 3.8 per cent drop in total exports that month, Statistics Canada said in a news release.
“Since the record reached in June 2022, the export values of these products have been on a general downward trend,” the government agency said. “After a 3.6 percent increase in April 2023, crude oil exports fell 8.3 percent and contributed more to the drop in energy product exports in May.”
Coal shipments fell 14.5 percent, with less metallurgical coal shipped to Asian countries.
“The drop [in energy exports] was primarily the result of lower prices and, to a lesser extent, crude oil export volumes,” Statistics Canada said.
Production disruptions had been reported due to the wildfires that began raging across the country in May, which have already exceeded annual averages in terms of area burned by 21.88 million acres, according to data from the Center for Canadian interagency wildfires from Friday.
Energy prices fell 5.9 percent in Canada in May, the fourth straight month of declines, leading the month-on-month drop of one percent in the country’s industrial goods price index. Year over year, energy prices fell 33.2 percent, the agency previously reported.
“Lower prices for diesel (-8.5%) and refined gasoline (-2.9%) were the main drivers of the decline in the energy and petroleum products group in May 2023,” he said Statistics Canada on June 19. “Light fuel oils (-14.5 percent) and jet fuel (-14.5 percent) also recorded monthly declines in May.
The international benchmark Brent averaged $75.47 a barrel in May, its lowest level since last year, when fuel prices rose after the invasion of Ukraine by from Russia, according to figures from the US Energy Information Administration (EIA). The global benchmark West Texas Intermediate averaged $71.58 a barrel that month, also the lowest since 2022, the EIA said.
For natural gas, the Henry Hub benchmark averaged $2.15 per million British thermal units, its lowest level since October 2020, according to EIA data .
Statistics Canada said energy prices fell in May mainly due to weaker crude oil prices, despite production cuts by the Organization of the Petroleum Exporting Countries Plus (OPEC+).
Eight countries in the expanded OPEC alliance, including top OPEC producer Saudi Arabia, announced production cuts in April. The separate April 2 announcements mean a combined curb of 1.649 million barrels per day from May to December. OPEC+ has already set a collective cut of two million bpd effective between November 2022 and December 2023.
In addition, Saudi Arabia set a drawdown of one million barrels per day for this month, the government’s Saudi Press Agency (SPA) reported on June 4, citing an unnamed official Ministry source of Energy That cut has been extended until August, the SPA said on Monday, citing an unnamed ministry source.
Russia, also a member of OPEC+, simultaneously set a production cut of 500,000 bpd for August, as announced on the government’s website.
Lower oil exports dragged down Canada’s trade with the US in May. Total exports to its neighbor fell by 2.9 percent.
“Imports from this country increased by 1.3 percent, mainly due to increased imports of engines and motor vehicle parts, as well as aircraft. As a result, Canada’s merchandise trade surplus with the United States narrowed from $8.7 billion in April to $6.7 billion in May, the smallest surplus since May 2021,” Statistics Canada said.
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