MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
March 14, 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)
 

Mar 1

$108.84
 

Mar 2

$106.70
 

Mar 5

$106.72
 

Mar 6

$104.70
 

Mar 7

$106.16
 

Mar 8

$106.58
 

Mar 9

$107.40
 

Mar 12

$106.34
 

Mar 13

$106.71
 Average Brent Crude since March 1 is $124.56.  Brett average for February $118.68.
 
  Average Average Average
  2012 2011 2010
January  $100.51  $89.44  $78.40
February  $102.26  $88.83  $76.16
March  $106.68  $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
Mar 9/12 $107.40 127.6 108.7 133.4
Mar 9/11 $104.38 115.7 97.9 125.4
YOY Diff. +3.02 +11.9 +10.8 +8.0
% Change +3% +10% +11% +6%

Commentary:

1. Platts Inventory Update:


The most recent weekly US Energy Department ("DOE") petroleum inventory assessment, issued Mar. 7, 2012, reported a smaller than anticipated increase in crude oil inventory. Increased production runs were noted in the period. Refinery production rose by 0.3 percent for the week ending Mar. 7, 2012. The total US production capacity was 83.9%. Declines in production in the US Atlantic and Midwest regions were offset by US Gulf and Rocky Mountain region production. US gasoline stocks and distillate stocks fell slightly in the period. 


DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 +832,000 -0.9%
 

 Gasoline

 -396,000 +0.1%
 

Distillates

 -1,944,000 -10.1%

Distillate product stocks continue to be below year ago levels, especially on the US Atlantic Coast.

2.  U.S Economic Highlights:
 

  •  MasterCard, in its weekly SpendingPulse report stated that gasoline demand fell sharply last week. For the week ended March 9, 2012 gasoline sales fell 1.4% and gasoline sales are off 7.2% from the same week last year.

  • Some economic signals on the US economy:

  • February retail sales rose 1.1 percent over January results, the largest gain in 5 months.  However, the retail sales gain, excluding the effects of rising gasoline prices, was 0.8 percent.

  • US automobile sales rose by 1.9% in February, the largest gain in 4 years.

  • Retail sales at home building stores posted a 1.4% increase.  The sales increase was attributed to warmer February weather for construction, low mortgage rates and a tight supply of new homes for sale.

  • The Dow, S&P 500 and Nasdaq markets are showing signals of investor confidence in the US economy with trading at near 4 year high levels.


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.
  • Economic conditions in Greece appear to have achieved the initial bail out objectives with the recent debt exchange agreement completed last week. German economic indicators, such as strong industrial production numbers, suggest that country will avoid a recession in 2012.

Note:

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