Unplanned supply outages at a high level (see Market Watch – Issue 5 ).

  • The wildfires in Canada caused the shutdown of about 1 million b/d of oil sands output capacity (including upgraded crude). Over recent days the situation deteriorated again, causing delays in the restart plans, however the restarts are set to come rather quickly as operators left their plants idling in a “hot mode” to ensure a fast return. In total we estimate a cut of over 700,000 b/d on average in May due to the wildfires.
  • Nigerian production dropped to only 1.4 million b/d according to officials, which is the lowest in 20 years. Qua Iboe is already being ramped up again and Forcados flows should come back in June.
  • There is no sign of a Neutral Zone comeback yet, while the Libyan situation improved slightly after rival Libyan factions agreed on a single oil authority. However, it remains to be seen whether the instability in country can be overcome.
  • Leaving out Libya (from which the outages should be factored in already), and Iran, we see unplanned outages at 1.9 million b/d in May, which is the highest in at least three years. However, with the gradual restart of Canadian oil sands operations and the reestablishment of Forcados flows in June, these outages should drop sharply within the next two months. The restart of the Jubilee field in Ghana and a rebound in Brazil should also lower other non-OPEC outage numbers going forward.