MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
January 14, 2016

 

The following analysis has been used by the Commission as part of its price adjustment methodology and is provided here to assist the public in understanding some of the background factors influencing current market prices.

 

Crude Track:
  Recent Crude (US$/bbl)
    WTI Brent
 

Jan 4

 $ 36.76

$ 37.22
 

Jan 5

 $ 35.97

$ 36.42
 

Jan 6

 $ 33.97

$ 34.23
 

Jan 7

 $ 33.27

$ 33.75
 

Jan 8

 $ 33.16

$ 33.55
 

Jan 11

 $ 31.41

$ 31.55
 

Jan 12

 $ 30.44

$ 30.86
 

Jan 13

 $ 30.48

$ 30.31
       
 Average Brent Crude for January: $ 33.49.
 
West Texas Intermediate
  Average Average Average Average
  2016 2015 2014 2013
January  $ 33.18  $ 47.56  $ 94.73  $ 94.70
February    $ 50.78  $100.57  $ 95.50
March    $ 47.87  $100.46  $ 92.73
April    $ 54.63  $102.15  $ 89.59
May    $ 59.37  $101.79  $ 94.93
June   $ 59.76  $105.14  $ 95.76
July   $ 50.93 $102.39  $104.68
August   $ 42.89 $ 96.08  $106.49
September   $ 45.48 $ 93.03  $106.24
October   $ 46.29 $ 84.52  $100.74
November   $ 42.94 $ 77.55  $ 94.00
December   $ 37.33 $ 59.82  $ 97.87
         
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Jan 13/16 $ 30.31 95.9 70.6 101.6
Jan 13/15 $ 45.89 94.8 86.2 119.5
YOY Diff. -15.58 +1.1 -15.6 -17.9
% Change -34.0% +1.2% -18.1% -15.0%

Commentary:


Crude futures continued to fall over the past two week period and reached a sub $32.00 per barrel level not seen since 2002.  Market concern about oversupply, continued weak economic data out of China, the imminent return of oil exports from Iran, the abandonment of production quotas by OPEC and the resilience of US domestic crude production have all influenced market pricing as of late.  Additionally, of particular relevance in recent days has been the appreciating value of the US dollar.  The value of the US dollar and the trading price of oil futures are inversely related as oil is priced in US dollars, hence, making speculative oil purchases more expensive as the dollar rises.  The continued resurgence of the US economy and its related impact on the US dollar in and of itself bodes for continued lower crude oil pricing.

Economic Data:

1. Platts Inventory Update:

The US Energy Department ("DOE") weekly petroleum inventory assessment, issued January 13, 2016, reported an increase in US crude stocks of 234,000 barrels.

US gasoline inventories increased by 8,440,000 barrels over the previous reporting period. Implied demand decreased by 202,000.

US distillate inventories increased by 6,136,000 barrels.  

US refinery utilization rates decreased by 1.3% to 91.2% of capacity.

 
 

 

Weekly
(bbl)

Year over Year
% Change
 

Crude

 +234,000 +24.4%
 

Gasoline

 +8,440,000 0%
 

Distillates

 +6,136,000 +18.4%
Source: DOE January 13, 2016

Note:

Legend:
DOE Department of Energy
RUL Regular Unleaded Gasoline
F/O Furnace Oil
WTI West Texas Intermediate