MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
February 29, 2012

 

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)
 

Feb 15

$101.80
 

Feb 16

$102.31
 

Feb 17

$103.24
 

Feb 21

$105.84
 

Feb 22

$106.28
 

Feb 23

$107.83
 

Feb 24

$109.77
 

Feb 27

$108.56
 

Feb 28

$106.55
 Average Brent Crude since February 15 is $122.01.  Brett average for February $118.68.
 
  Average Average Average
  2012 2011 2010
January  $100.51  $89.44  $78.40
February  $101.76  $88.83  $76.16
March    $102.74  $81.12
April    $109.67  $84.46
May    $101.29  $74.14
June    $96.40  $75.39
July    $97.43  $73.95
August    $86.23  $77.00
September    $86.13  $75.55
October   $86.10  $81.99
November   $96.86  $84.25
December   $98.51  $89.09
         
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Feb 27/12 $108.56 125.0 106.3 131.7
Feb 27/11 $96.97 111.0 93.9 121.2
YOY Diff. +11.59 +14 +12.4 +10.5
% Change +12% +13% +13% +8.7%

Commentary:

1. Platts Inventory Update:


The most recent weekly U.S. Energy Department ("DOE") petroleum inventory assessment, issued Feb. 23, 2012, reported an increase in U.S. crude petroleum inventories.  U.S. crude oil inventories rose 1.633 million barrels.  Gasoline inventories fell by 649,000 barrels and distillate product stocks fell by 208,000 barrels.  The largest gasoline inventory decline was in the U.S. Gulf Coast region.  Gasoline product stocks in the Atlantic Coast region showed an increase of 2.2 million barrels which put Atlantic Coast inventories above the five-year average inventory level. 


DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 +1,633,000 -1.7%
 

 Gasoline

 -649,000 -2.8%
 

Distillates

 -208,000 -10.3%

2.  U.S Economic Highlights:
 

  •  MasterCard's weekly SpendingPulse survey showed U.S. gasoline demand increased 3.4% last week which is the first demand gain reported in 3 weeks.

  • U.S. retail gasoline prices have increased by more than 10 percent since the start of 2012.  Some market analysts are attributing the rising prices to the recent closures of several large refineries in the eastern U.S. and the large St. Croix refinery in the U.S. Virgin Islands.  Market analysts note that older refineries have been faced with tight margins due to rising crude prices, declining demand and the uncompetitive operating costs of older refineries versus newer natural gas based refinery operations.

  • Several U.S. economic indicators point to an improving U.S. economy.
    i. Pending new home sales in the     U.S. have reached a 2 year high.
    ii. Improved hiring statistics in the     U.S. manufacturing sector.
    iii. The     U.S. National Association for Business Economics projects growth in U.S. gross domestic product at 2.4% in 2012.


3.  Other:
 
  •  Unrest in Syria and the continuing tensions between European and North American countries with Iran over their nuclear enrichment activities continue to place a premium on crude oil futures prices.

Note:

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