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Venezuela’s Future Still Looks Dark

Venezuela’s crude oil production sank to as low as 250,000 b/d during the blackout last week. We estimate monthly production will be 750,000 b/d, down 200,000 b/d from January and February. While Maduro continues to hang on – and we expect he will manage to do so for months, not weeks — the US continues to apply tighter sanctions. Secondary sanctions are on in practice, if not in law. Rosneft and ChinaOil will still lift as much as 250,000 b/d. With throughput low, a sustainable production level over the next couple of months for Venezuela is around 450,000 b/d. Although a political transition does not appear imminent, a clear-eyed look at what would come next shows that production will not rise back above 1 million b/d any time soon.

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Project Delays Lower Oil Sands Production

Planned Canadian Oil Sands projects are being pushed back in response to further delays in pipeline egress and the mandated output cuts by the Alberta provincial government. The outlook for Oil Sands production in 2019 has worsened, with production now forecast to be almost 230,000 b/d lower than last year, averaging 2.7 million b/d. In 2019, lower levels of production will reduce the call on rail, lowering crude-by-rail volumes from the record highs set in the fourth quarter of 2018.

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