Energy markets experienced a period of normalization in 2023 following a peak in 2022. Although demand for liquids reached a record high, supply continued to grow. The first half of 2023 saw a decline in crude oil prices due to higher inventory levels. However, prices rebounded in the second half thanks to strong demand, limited supply from OPEC+ oil producers, and tightening inventory levels. The Canadian WTI/WCS spread weakened in the fourth quarter but remained consistent with 2022 on an annual basis.
Throughout 2023, the refining industry witnessed robust demand for gasoline and distillate, coupled with low inventories, which helped maintain strong refining margins. However, refining margins in the fourth quarter were impacted by higher inventory levels and lower seasonal demand.
Imperial Oil achieved impressive upstream production figures in the fourth quarter, averaging 452,000 gross oil-equivalent barrels per day. This represents the highest quarterly production in over 30 years when adjusting for the divestment of XTO Energy Canada. For the full year, production reached 413,000 gross oil-equivalent barrels per day.
The Kearl asset played a significant role in these achievements, with quarterly total gross production averaging 308,000 barrels per day (218,000 barrels representing Imperial’s share). This marks the highest quarterly production in Kearl’s history.