The Canadian economy grew by 0.3% in October, driven by gains in oil and gas extraction, mining, and quarrying, according to Statistics Canada’s latest monthly GDP report. Oil and gas extraction, along with mining and quarrying, rose by 2.4%, with all three subsectors showing improvement.
“Canada’s economy is gaining momentum as the year ends, and we expect growth to approach 2% in the fourth quarter,” said Andrew DiCapua, senior economist at the Canadian Chamber of Commerce, in a statement to clients. “If this trend continues, it could impact the Bank of Canada’s decision in January, potentially slowing the pace of interest rate cuts.”
Despite ongoing concerns about potential tariffs under a second Trump administration, Canada’s oil and gas companies remain optimistic. Suncor Energy, a major oil sands producer, has outlined plans to increase its production next year. The company aims to boost its oil and gas output to between 810,000 and 840,000 barrels per day by 2025, up from an estimated range of 770,000 to 810,000 barrels per day in 2024. Suncor also expects refining utilization to range between 93% and 97%. For capital spending, the company plans to allocate C$6.1 to C$6.3 billion, with 45% earmarked for economic investments. This represents a slight decrease from the 2024 capex range of C$6.3 billion to C$6.5 billion. Suncor’s efforts to lower its cash operating costs are expected to reduce its breakeven price by $10 per barrel compared to 2023.
Other Canadian energy giants, including Imperial Oil and Cenovus Energy, have similar plans to increase production. Despite global uncertainties, Canadian oil and gas stocks have significantly outperformed their U.S. counterparts. The S&P/TSX Equal Weight Oil & Gas Index, which tracks Canadian oil and gas performance, has gained 17.6% this year, more than four times the 4.3% increase seen in the S&P 500 Energy Sector.
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