CALGARY -- The CEO of Suncor Energy Inc. says the company won't quickly ramp up oil production despite recent higher crude prices as the North American economy begins to reopen following the easing of lockdowns from the COVID-19 pandemic.

Mark Little says he won't “bet the financial health” of the company on the nascent recovery, listing a host of risks including the possibility of a second wave of virus outbreaks.

On a conference call to discuss second-quarter results, Little reiterated his contention that the energy sector recovery will be led by consumers of its refined products, with higher demand for fuel translating into more demand for oil.

Little says Suncor's refinery utilization rate of 76 per cent in the three months ended June 30 (allowing crude throughput of 350,400 barrels per day), was well ahead of industry averages, and credited that to its ability to assess customer needs through its wholesale and retail networks, including its Petro-Canada service stations.

Suncor's total production was 655,500 barrels of oil equivalent per day during the second quarter, 18.5 per cent less than the 803,900 boe/d in the prior year quarter, as it took measures including shutting down one of the two production trains at its 194,000-bpd Fort Hills oilsands mine in northern Alberta.

Little said putting the second train back in service depends on oil prices, the ongoing Alberta oil output curtailment program which has prevented full production at Fort Hills and Suncor's ability to control costs.

“During the second half of 2020 we see continued strengthening of downstream (refining) demand in gasoline and diesel to more seasonal levels by the end of the year,” said Little.

“Given the high level of global crude inventories and the return of production which was shut in during the second quarter, we expect (oil) pricing and crude spread volatility to remain through 2020, although obviously not as extreme as we saw in the second quarter.”

In early trading in Toronto on Thursday, Suncor shares fell by as much as 90 cents or 3.75 per cent to $23.97.

It reported late Wednesday a second-quarter net loss of $614 million or 40 cents per share, down from net earnings of $2.73 billion or $1.74 per share in the same period of 2019, but ahead of analyst expectations of a net loss of $1.28 billion, according to Refinitiv.

This report by The Canadian Press was first published July 23, 2020