MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
May 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 WTI Crude (US$/bbl)
 

May 1

$106.16
 

May 2

$105.22
 

May 3

$102.54
 

May 4

$ 98.49
 

May 7

$ 97.94
 

May 8

$ 97.01
 

May 9

$ 96.81
 

May 10

$ 97.08
 

May 11

$ 96.13
 Average Brent Crude for May $114.58. 
 
  Average Average Average
  2012 2011 2010
January  $100.51  $89.44  $78.40
February  $102.26  $88.83  $76.16
March  $106.36  $102.74  $81.12
April  $103.18  $109.67  $84.46
May  $ 99.71  $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
May 10/12 $ 97.08 123.4 100.8 124.8
May 10/11 $103.88 128.6 103.4 126.1
YOY Diff. -6.80 -5.2 -2.6 -1.3
% Change -6.5% -4% -2% -1%

Commentary:

1. Platts Inventory Update:


The most recent weekly U.S. Energy Department ("DOE") petroleum inventory assessment, issued May 9, 2012, reported an increase in crude inventory levels which were attributed to U.S. imports from Saudi Arabia.  U.S. imports from Saudi Arabia increased by 259,000 barrels/day (b/d) to 1.676 million b/d.  The largest source of U.S. crude comes from Canada which provides 2.255 million b/d.  Inventory levels of U.S. gasoline fell during the most recent inventory reporting period. Implied gasoline demand was 1.3% lower than year ago and 6.08% below mid-March demand levels.


DOE Report (May 9, 2012):

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 +3,652,000 +2.5%
 

 Gasoline

 -2,613,000 +0.6%
 

Distillates

 -3,251,000 -16.3%

MasterCard, in its weekly SpendingPulse report stated that gasoline demand fell by 0.7 percent last week. Gasoline consumption was 5.8 percent below year earlier levels. The U.S. average price per gallon last week was $3.81, down 3 cents.

2.  U.S Economic Highlights:
 

 Some economic signals on the U.S. economy:

  • U.S. jobless claims (unemployment benefits) declined last week to the lowest level in a month. First time claims fell by 1,000 to 367,000 for the period ending May 5.

  • Bloomberg's Consumer Confidence Index declined for the third straight week.

  • The U.S. trade deficit widened by 14 percent in the most recent reporting period. The higher price of fuel and an increase in imports from China drove the increase in trade deficit numbers.


3.  Other:
 

  • OPEC announced that its crude production rose in April as Iraq and Libya ramped up production. Saudi Arabia stated that it will supply crude oil to its customers in June at the same levels as May contracts.

  • Restrictions on the Iranian shipment of crude oil does not appear to have any affect on world crude supply as other oil producing countries have filled any gaps in supply.

Note:

Legend:
DOE Department of Energy
RUL Regular Unleaded Gasoline
F/O Furnace Oil
WTI West Texas Intermediate