We estimate 1.1 million b/d crude oil production has been shut-in so far, taking away 1 bcfd of gas demand along with it for a few days in May. However, Wood Mackenzie estimates that even with the demand destruction from the wildfires in May, market fundamentals have already strengthened considerably from a year ago. Accounting for these reductions in oil sand sector, gas demand for May looks to be on par with last year's level, and WCSB gas demand for the rest of the injection season is higher year-over-year. With lower production by the end of the year and continued ramp-up of new oil sands projects, Canadian exports could fall by the end of the year, supporting the anticipated Henry Hub price recovery in 2017.
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Insight | May 2016
Canadian wildfires weaken natural gas demand but mask strengthening market fundamentals
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