Article content continued

The group’s updated forecasts, due out next week, will likely show a very different trajectory, according to Greg Stringham, vice president of oil sands and markets.

“(Condensate) had been in decline. We are now seeing relatively strong growth,” he said. He declined to give exact numbers until the report is released on Monday. In April, Canada’s National Energy Board said it expected output to rise 13% this year to 172,000 bpd.

While the growth is modest compared to the shale revolution that is upending the U.S. industry in places like North Dakota and Texas, its impact may reverberate far south of the border.

Rising domestic supply is coming at a time of lower than expected demand for imported U.S. diluent because more companies are moving to ship bitumen by rail, which doesn’t necessarily need to be diluted, instead of pipeline.

As a result, the trends may further depress U.S. condensate prices and thus add to mounting political pressure to relax U.S. rules barring overseas exports.

Along with a newly reversed Cochin pipeline that will start delivering up to 95,000 barrels per day of U.S. condensate from Illinois to Alberta in July, some producers are growing hopeful that prices may finally begin to ease.

“I don’t believe there’s such a thing as cheap condensate. But all other things being equal, more supply coming into the basin should be a positive thing for the buyer,” said Rick Dembicki, director of crude oil marketing at Cenovus, which sources half its condensate from outside the province.