Petroleum pricing in Canada — the Q4 2023 report
Crude oil prices declined to a 24-month low in December, allowing retail petroleum prices to decline in the fourth quarter. A contraction in gasoline refining margins in the fourth quarter brought retail gasoline prices to a yearly low.
In the U.S., crude oil production reached a record level of 13.3 million BBL/d in December. Similarly, data available for November of this year shows that crude oil production in Alberta reached a record level of 4.2 million BBL/d.
Retail gasoline prices fell in the fourth quarter as crude oil prices declined and gasoline refining margins contracted, reaching a 31-month low in October. A seasonal decline in demand allowed gasoline refining margins in Canada to contract from over 40c per litre in June through to August to as low as 24.5c per litre in October.
Canadian regional gasoline and diesel market overview
Retail Gasoline prices fell in all regions of the country, with the most significant decline occurring along the West Coast of Canada, where prices fell nearly 32c per litre from the end of the previous quarter. Refinery issues south of the border were alleviated in the fourth quarter, allowing refining margins to contract over 10c per litre.
Canadian fuel market outlook
Towards the end of 2023, record North American crude oil production contributed to rising crude oil stocks and lower petroleum prices. As we head into 2024, strong crude oil production from North America is expected to continue. Also, as more Canadian crude oil is expected to reach global markets with the Trans Mountain Pipeline expansion coming online, we will likely see amply supplied crude oil markets. Although The Organization of Petroleum Exporting Countries and Allies (OPEC+) will likely maintain voluntary production limits in 2024, crude oil markets are expected to be mostly balanced in 2024, leading to little price movement from current levels. However, increased risks due to rising tensions in the Middle East could potentially affect crude oil supplies and lead to sudden price spikes.
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