The Canadian economy grew 0.3 per cent in October, helped by strength in oil and gas extraction, mining and quarrying, Statistics Canada has revealed in its monthly GDP release. Oil and gas extraction, mining and quarrying rose 2.4 per cent in October with all three subsectors rising.
“Canada’s economy is picking up steam as we wrap up the year, and we’re expecting growth in the fourth quarter close to two per cent,” wrote Andrew DiCapua, a senior economist at the Canadian Chamber of Commerce, in a note to clients. “If this momentum holds, it could influence the Bank of Canada’s January decision–possibly slowing the pace of rate cuts in the new year,” he added.
The threats of tariffs under a second Trump administration have not dissuaded Canadian oil and gas majors from drawing up plans to drill even more. Canada’s oil sands producer, Suncor Energy (NYSE:SU), has unveiled plans to increase its oil and gas output next year as it continues to work to improve its performance and lower costs from its assets. Suncor has set a target to grow oil and gas production to between 810,000 and 840,000 barrels per day in 2025, up from its 2024 estimated range of 770,000 to 810,000 barrels per day, and sees annual refining utilization of 93% to 97%.
In terms of capex, the oil sands giant plans to spend in the range of C$6.1 to C$6.3 billion, with 45% allocated to economic investments. That marks a reduction from C$6.3 billion to C$6.5 billion for 2024 capex. Suncor’s lower cash operating costs per barrel reflects its initiative to reduce its corporate WTI breakeven by $10 per bbl versus 2023, the company said.
Canada’s Imperial Oil (NYSE:IMO) and Cenovus Energy (NYSE:CVE) have unveiled similar plans, even as Canadian oil and gas stocks continue to outperform their American brethren. Canada’s oil and gas benchmark, the S&P/TSX Equal Weight Oil & Gas Index, has returned 17.6% in the year-to-date, more than 4x the 4.3% gain by the S&P 500 Energy Sector.
By Alex Kimani for Oilprice.com
