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Canadian oil sands producers lead by Cenovus Energy Inc. plan to expand production next year despite an impending supply glut that threatens to deepen the slump in crude prices.
All four of Canada’s biggest oil companies including Cenovus, Canadian Natural Resources Ltd., Suncor Energy Inc. and Imperial Oil Ltd. are forecasting higher output in 2026, according to guidance midpoints.
Cenovus is predicting an increase of roughly 18%, largely to account for its November takeover of MEG Energy Corp. as well as expansion projects at legacy assets.
Source: Companies
Note: Guidance is in barrels a day
Canadian drillers are boosting crude production to take advantage of surplus pipeline capacity to export terminals in Canada’s Pacific Coast. Last year’s expansion of the Trans Mountain system probably won’t be completely filled to capacity until 2027, according to the pipeline operator. What’s more, Enbridge Inc. has rolled out plans to expand a pipe network that feeds oil-sands crude to US markets.
Additional Canadian barrels threaten to worsen what the International Energy Agency projects will be an unprecedented global crude surfeit. That forecast already bumped US benchmark prices down 22% this year, putting them on track for the worst annual performance since 2018.
Western Canadian crude is typically priced at a discount to West Texas Intermediate futures, which were up 1.5% to $56.08 a barrel at 11:38 a.m. in New York on Wednesday.
Although the OPEC+ alliance tends to dominate oil-market headlines, Canada wields considerable weight in overall supply fundamentals given its status as the world’s No, 4 crude producer behind only the US, Saudi Arabia and Russia.
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