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MARKET
ANALYSIS
AS PREPARED BY COMMISSION STAFF
April 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.
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Crude Track (In U.S. $ per Barrel): |
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April 1 |
$107.94 |
April 4 |
$108.47 |
April 5 |
$108.34 |
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April 6 |
$108.83 |
April 7 |
$110.30 |
April 8 |
$112.79 |
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April 11 |
$109.92 |
April 12 |
$106.25 |
April 13 |
$107.11 |
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Average |
Average |
Average |
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2011 |
2010 |
2009 |
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January |
$89.44 |
$78.40 |
$41.96 |
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February |
$88.83 |
$76.16 |
$38.58 |
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March |
$102.74 |
$81.12 |
$47.96 |
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April |
$109.10 |
$84.46 |
$49.82 |
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May |
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$74.14 |
$55.96 |
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June |
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$75.39 |
$69.60 |
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July |
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$73.95 |
$63.93 |
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August |
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$77.00 |
$71.04 |
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September |
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$75.55 |
$69.08 |
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October |
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$81.99 |
$75.56 |
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November |
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$84.25 |
$78.31 |
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December |
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$89.09 |
$73.88 |
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Commentary: |
Crude prices traded at their highest level since September 2008 over the
past two weeks as a falling U.S. dollar, continued geopolitical unrest
in North Africa and the Middle East and increased global demand in both
emerging and developed nations all combined to create an upward pressure
on market price. Refined product prices followed suit as increased crude
costs coupled with a number of unanticipated refinery production
interruptions together drove gasoline and distillate prices to their
highest levels in over 2½ years. An overall market correction occurred
on Tuesday of this week as the IMF cut its growth forecasts for both the
U.S. and Japan and a Goldman Sachs report claimed that current prices
are not sustainable resulting in a significant reduction in both crude
and refined product pricing. Notwithstanding, Wednesday's DOE report
reflecting a significant draw in gasoline inventories and an implied
increase in overall fuel demand reversed this correction sending both
crude and refined product trading values back up.
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US $
Per Barrel |
CDN
Cents
Per Litre |
CDN Cents
Per Litre |
CDN Cents
Per Litre |
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CRUDE |
RUL |
F/O |
DIESEL |
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April 12/11 |
$106.25 |
121.2 |
103.4 |
130.5 |
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April 12/10 |
$84.34 |
104.0 |
78.3 |
102.7 |
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YOY Diff. |
+21.91 |
+17.2 |
+25.1 |
+27.8 |
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% Change |
+26% |
+16% |
+32 |
+27% |
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1. DOE Report: |
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Weekly (bbl) |
Year over Year |
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Crude |
+1,600,000 |
+1.5% |
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Gasoline |
-7,000,000 |
-5.3% |
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Distillates |
-2,700,000 |
+2.8% |
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2. Demand:
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•
Conflicting information was posted this past week regarding demand and
specifically:
According to MasterCard Advisors Spending Pulse data, this past week
U.S. retail stations sold 3% less than the corresponding week of 2010.
This represents a 1.8% decrease from the prior week and amounts to the
third straight weekly decline. The year-on-year comparison was the sixth
straight such drop. In addition, the four week average represented a
1.9% year-on-year decline.
• U.S. DOE reported on Wednesday a
significant draw on gasoline inventories and an implied demand for fuel
increase of 3.7% week over week. Gasoline draws this time of year
are not abnormal and are in part related to increased traffic and
related anticipation of same. Recent draw statistics, however,
have eroded the surplus against the five year average.
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3. Economic:
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• The International Monetary Fund cut its growth forecasts for the
U.S. and Japan indicating that high oil prices pose a risk to global
economic expansion. As a result crude prices have tumbled in excess of
3% as the IMF predicted in its World Economic Outlook that the U.S.
economy will expand at a slower pace than in 2010 amid an unemployment
rate in excess of 8% and a drop in consumer confidence.
• According to the IMF, the U.S., the world's largest economy and the
biggest oil consumer, will expand 2.8% this year, down from 2.9% last
year. The Conference Board reported consumer confidence dropped to a
three month low in March and the jobless rate was 8.8%.
• Japanese growth was cut to 1.4% from 1.6% in the previous forecast
after the nation's March 11 earthquake and tsunami the IMF reported.
Expansion in China, the world's second-largest oil-consuming country,
was projected at 9.6% this year unchanged from the January forecast.
• The U.S. Commerce Department reported this week that U.S. retail sales
climbed in March for a ninth consecutive month.
• The U.S. Labor Department reported this week that the U.S. economy
created 216,000 jobs in March, the most since May 2010 while the jobless
rate fell for a fourth straight month to a two year low of 8.8%.
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Legend: |
| DOE |
Department of Energy |
| RUL |
Regular Unleaded Gasoline |
| F/O |
Furnace Oil |
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