Crude prices continued to fall over the past two weeks, dropping in excess of $4.00 per barrel or 13% over the period.  The collapse of the Russian initiative to solidify OPEC and non-OPEC production cuts, weaker than anticipated Chinese economic news and the prospect of increased Iranian post-sanction exports all combined to exert a negative pressure on crude market prices.  Going forward, the IEA in its most recent report indicated that with Iraqi production now at record levels of 4.35 million b/d, resilient US shale crude production levels of 12 million b/d and the onset of Iranian crude exports of approximately 3 mm per day, the current global crude oil situation is not about to change significantly any time soon.

With regard to refined product pricing, record builds in inventory levels of gasoline and mild winter weather conditions experienced thus far this year have resulted in depressed refined product market pricing.  An unexpected shut down of Irving's Saint John refinery on Wednesday night immediately impacted gasoline prices and will  bear watching over the next few days.

1. Platts Inventory Update:

The US Energy Department ("DOE") weekly petroleum inventory assessment, issued February 10, 2016, reported a decrease in US crude stocks of 754,000 barrels.

US gasoline inventories increased by 1,258,000 barrels over the previous reporting period. Implied demand increased by 781,000 b/d.

US refinery utilization rates decreased by 0.5% to 86.1% of capacity.