Alberta continued to rise in the first quarter.

In fact, Alberta’s average daily oil production in March was the highest ever for that month, as was the case for January and February.*

New data from the Alberta Energy Regulator shows that oil production in Alberta averaged 4.19 million barrels per day in March, up from 4.04 million barrels per day during the same month last year (+3.6%).

Oil sands output, which accounted for 84% of total oil production in March, was up by 3.5% compared to March 2024 while conventional (including condensate) production climbed by 4.4%.

Despite weaker oil prices in April, the uncertainty and economic damage created by U.S. trade policy and more OPEC+ supply coming online, we expect that the extra transportation capacity provided by the still-not-full TMX pipeline will continue to support a rise in daily production levels this year. During the first quarter, average daily oil production was up 5.1% over the same period last year.

Over 95% (by value) of Alberta crude exports went to the U.S. last year, where the applicable U.S. tariff rate on Canadian energy was 10% in March and April. However, producers could (and still can) receive an exemption by demonstrating that they are compliant with the rules of origin requirements in the Canada-UnitedStates-Mexico Agreement (CUSMA).

A related factor likely to be playing a role in keeping production volumes elevated is rising Canadian crude demand from China to replace U.S. imports. According to TMX Chief Executive Officer Mark Maki, Trans Mountain has sent roughly half of the shipments from its marine terminal in B.C. to countries other than the United States since May 1 when commercial operations of the expanded pipeline began.

With that said, if the recent pullback in benchmark prices is sustained, it could result in reduced investment in future production growth. As always we will be closely monitoring company guidance and adjusting our forecast accordingly.

Spoiler alert: Statistics Canada has just released its initial estimate of GDP growth by province in 2024. We will dig into this in tomorrow's weekly wrap-up, but here's a sneak peak: Alberta’s real GDP grew by 2.7% in 2024 (very near our estimate of 2.5%). This was higher than the national average of 1.6% and puts Alberta in a tie with Nova Scotia as Canada's third fastest growing province last year.

*Because oil extraction is a seasonal business it is best to compare the same months to one another on an annual basis rather than change from one month to the next. The highest daily production level of any month was set in December 2024 at 4.26 million barrels per day.

Answer to the previous trivia question: Featuring a profile of Queen Victoria, the first adhesive postage stamp used in a public postal system was first issued in the United Kingdom on May 1, 1840 (but was not valid for use until May 6).

Today’s trivia question: What's the difference between gross domestic product and gross national product?