MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
January 30, 2009

 

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.

 
Pump Price Comparison:
As of January 27.
  Gasoline Diesel Furnace Oil
  Pump
Price		 Diff.

Ex. Tax

 Diff. Pump
Price		 Diff.

Ex. Tax

 Diff. Pump
Price		 Diff.

Ex. Tax

 Diff.
Charlottetown 78.9 - 51.1 - 96.5 - 68.7 - 77.3 - 73.6 -
Moncton 80.5 +1.6 50.6 -0.5 100.5 +4.2 68.1 -0.6 82.0 +4.7 72.6 -1.0
Halifax 85.4 +6.9 50.1 -1.0 95.0 -1.5 64.6 -4.1 76.4 -0.9 72.8 -0.8
Fredericton 81.1 +2.2 51.1 - 100.1 +3.6 67.7 -1.0 81.2 +3.9 71.9 -1.7
St. John's 91.3 +12.4 54.3 +3.2 97.8 +1.3 66.0 -2.7 77.6 +0.3 68.7 -4.9

NB Adjustments Jan 29:  Gas -0.68;  F/O -2.63;  Diesel -2.1
NS Adjustments Jan 30:  Gas -1.3;  Diesel -0.2

Crude Track (In U.S. $ per Barrel):

Crude Track:

Jan. 16 $36.51 Jan. 20 $38.74 Jan 21 $43.55
Jan. 22 $43.67 Jan. 23 $46.47 Jan 26 $45.73
Jan. 27 $41.58 Jan. 28 $42.16 Jan 29 $41.44
 
  Average Average Average Average
  2009 2008 2007 2006
January $41.96 $93.06 $54.43  
February   $95.34 $59.42  
March   $105.62 $60.86  
April   $110.72 $64.08  
May   $124.98 $63.54  
June   $134.02 $67.46  
July   $134.29 $73.80  
August   $116.81 $72.17 $73.10
September   $104.27 $79.52 $63.89
October   $76.72 $85.19 $59.20
November   $57.44 $94.95 $59.41
December   $42.17 $91.24 $62.09

Commentary:


The current gasoline market in New York Harbour continues to be characterized as being in contango status.  This is a situation where future market prices are deemed to be higher than current spot market prices.  This condition, which has been in existence for almost a month now, has encouraged stockpiling of gasoline inventories and has served to effectively transfer typically seasonal surplus product from the spot market to inventory where it awaits higher market prices.  As a result, spot market prices have been pressured upward.  Adding to market dynamics is a combination of reduced refinery production combined with regularly scheduled maintenance production interruption.
 
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Jan. 28/09       $42.16 78.9 74.2 98.6
Jan. 28/08 $90.99 108.3 89.7 115.1
YOY Diff. -48.83 -29.4 -15.5 -16.5
% Change -54% -27% -17% -14%

 

1.  DOE Report - January 28, 2009

 

 

Weekly (bbl)

 Year over Year
Crude +6,200,000 +15.6%
Gasoline -100,000 -1.7
Distillates -1,000,000 +13.3%

2. Predictions:


Deutsche Bank economists this week are forecasting that global oil demand could drop 1% to 2% in 2009. The range of possible demand destruction could run between 900,000 to 1.7 million barrels per day.

Goldman Sachs this week predicted that plunging demand for oil should reduce oil prices to $30/bbl in the first quarter of 2009 followed by a swift rebound to $65/bbl by the end of the year.

3.  Economic News:


The U.S. Labor Dept reported this week that jobless claims rose by 159,000 in the week of January 17th to a seasonally adjusted 4.78 million, the most since government records began in 1967.

Orders for U.S. made durable goods slumped 2.6% in December on weaker demand for almost all products except defense-related items the Commerce department reported.


4.  OPEC:


OPEC indicates that its members may seek additional production quota reductions in an attempt to shore up crude prices. At a recent World Economic Forum in Switzerland, OPEC secretary General Abdalla Salem El-Badri stated that "we are not happy with 40, even 50 dollars a barrel".
 

Note:

Legend:
DOE Department of Energy
RUL Regular Unleaded Gasoline
F/O Furnace Oil