MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
March 14, 2011

 

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 (In U.S. $ per Barrel):
March 1 $99.63 March 2 $102.23 March 3 $101.91
March 4 $104.42 March 7 $105.44 March 8 $105.02
March 9 $104.38 March 10 $102.70 March 11 $101.16
 
  Average Average Average
  2011 2010 2009
January  $89.44  $78.40 $41.96
February  $88.83  $76.16 $38.58
March  $102.98  $81.12  $47.96
April    $84.46  $49.82
May    $74.14  $55.96
June    $75.39  $69.60
July    $73.95  $63.93
August    $77.00  $71.04
September    $75.55  $69.08
October    $81.99  $75.56
November    $84.25  $78.31
December    $89.09  $73.88

Commentary:


Platts Inventory Update:
 Total US crude stocks are up 2.516 million barrels (m/b) for the week ending March 4 due mainly to strong imports and reduced refining. At 3.4891 m/b, US crude stocks are ahead of the five year average inventory level and year ago inventory levels. Refined product stock inventory levels continue to fall below year ago levels due to lower imports and refinery output. Gasoline demand was steady compared with this period last year and distillate demand was above year ago levels.

 
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Mar 11/11 $101.16 115.7 97.9 125.4
March 11/10 $82.11 104.0 78.3 102.7
YOY Diff. +19.05 +11.7 +19.6 +22.7
% Change +23% +11% +25% +22%

 

1.  DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 +2,516,000 +1.71%
 

 Gasoline

 -5,494,000 No change
 

Distillates

 -3,977,000 +3.75%

2.  Economic Highlights:
 

There is continued concern that rising petroleum prices will threaten the US economic recovery. The rising prices of petroleum and rising food prices may hamper US consumer spending. Rising US trade deficit and jobless rate numbers as well as the lowering of consumer confidence indexes are signs the US economy is affected by the recent petroleum price increases according to recent Bloomberg economic reports.

3. Other:
 

• Platts US Marketscan reports that increasingly favourable trans-Atlantic arbitrage economics is leading to summer grade cargoes of fuel to US Atlantic Coast from Europe, Mediterranean and Asian sources. This may provide positive supply conditions in North America and impact market prices in the short term.

• US refinery utilization increased 1.1 percentage points above last week's level to achieve capacity utilization of 82.0%.

• Crude prices continue to be influenced by political unrest in the countries of northern Africa.  Libya, the current centre of unrest, is an oil producing country (1.6 million barrels per day, 17th largest in the world) with markets in Europe. Their light sweet crude product is highly valued by refineries due to processing efficiencies of light sweet crude. During the current unrest, Libyan production is down to one half a million barrels a day.

• Financial analysts have indicated that the crude futures market is attracting a surge of speculative money. Speculative firms, who do not take delivery of the product, have nearly twice as many long contracts open now as they did in 2008 when oil spiked to $147. Holding long contracts is an indication these firms are betting that crude futures will increase before contract delivery is required.

Note:

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