Proponents of oil pipeline development in Canada are going to love Statistics Canada's new numbers on Canada's oil and gas supply and demand.
In November, Canada's crude oil production was up 6.4 per cent from a year earlier – and most of that went to export. Yet exports were up only 1.6 per cent. Meanwhile, Canada's imports of oil skyrocketed 14.6 per cent from a year earlier.
The numbers support what the oil industry has been telling us: An oil glut has been building because production is rising, yet insufficient pipeline capacity and new supplies from U.S. shale oil has meant that these increased domestic supplies are having trouble finding export markets. At the same time, refiners in the eastern half of Canada are relying on imported supplies, rather than gobbling up the domestic overhang, because the pipelines aren't in place to deliver the Western Canadian crude to them.
The natural gas data, meanwhile, appear to show the continued effects of the U.S. shale gas boom on the Canadian gas extraction business. Production was down 3.2 per cent in November from a year earlier, but exports were down even more, 5.4 per cent. At a glance, at least, it looks as if weak prices and a very well-supplied U.S. market are discouraging producers somewhat. However, let's remember that natural gas is highly sensitive to weather-related shifts in demand; we shouldn't read too much into a single month's data.