Canadian Economy Grows as Oil and Gas Companies Push for Expansion

The Canadian economy expanded by 0.3% in October, fueled by gains in oil and gas extraction, mining, and quarrying, according to Statistics Canada's monthly GDP report. Oil and gas extraction, mining, and quarrying collectively increased by 2.4% in October, with all three subsectors showing growth.

Andrew DiCapua, a senior economist at the Canadian Chamber of Commerce, noted, '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 percent.' He added, '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.' Despite threats of tariffs under a second Trump administration, Canadian oil and gas companies are proceeding with plans to increase drilling activities. Suncor Energy, Canada's leading oil sands producer, has announced plans to boost its oil and gas output next year as it works to enhance performance and reduce costs. Suncor aims to raise oil and gas production to between 810,000 and 840,000 barrels per day by 2025, up from an estimated 770,000 to 810,000 barrels per day in 2024, and projects annual refining utilization of 93% to 97%. Regarding capital expenditures, Suncor plans to invest between C$6.1 billion and C$6.3 billion, with 45% allocated to economic investments, representing a decrease from the C$6.3 billion to C$6.5 billion projected for 2024. Suncor's lower cash operating costs per barrel reflect its efforts to reduce its corporate WTI breakeven by $10 per barrel compared to 2023. Canada's Imperial Oil and Cenovus Energy have also unveiled similar expansion plans, even as Canadian oil and gas stocks outperform their American counterparts. Canada's oil and gas benchmark, the S&P/TSX Equal Weight Oil & Gas Index, has returned 17.6% year-to-date, more than four times the 4.3% gain by the S&P 500 Energy Sector

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