MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
June 14, 2010

 

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):
June 1 $72.58 June 2 $72.86 June 3 $74.61
June 4 $71.51 June 7 $71.44 June 8 $71.99
June 9 $74.38 June 10 $75.48 June 11 $73.78
 
  Average Average Average
  2010 2009 2008
January  $78.40 $41.96 $93.06
February  $76.16 $38.58 $95.34
March  $81.12  $47.96 $105.62
April  $84.46  $49.82 $110.72
May  $74.14  $55.96 $124.98
June  $73.10  $69.60 $134.02
July    $63.93 $134.29
August    $71.04 $116.81
September    $69.08 $104.27
October    $75.56 $76.72
November    $78.31 $57.44
December    $73.88 $42.17

Commentary:


Crude prices remained relatively stable over the past two weeks averaging $73.10 for the period versus $74.14 for the month of May.  Conflicting news as to the state of recovery of the U.S. economy, continued concern over the European debt crisis and its impact on the recovery of global crude demand and the fluctuating value of the U.S. dollar continued to be the primary price determinants. With regard to refined products, gasoline demand continues to languish. Indeed, the bump in demand traditionally associated with the Memorial Day weekend was virtually unnoticeable this year.  Coupled with adequate inventory the absence of demand recovery will most likely result in the elimination of price volatility for the coming summer months. Increased distillate demand from South America has supported market pricing for diesel and furnace oil over the past two weeks.
 
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
June 10/10       $75.48 99.8 74.3 98.9
June 10/09 $71.33 102.5 70.7 93.0
YOY Diff. +11.10 -2.7 +3.6 +5.9
% Change +17.0% -3.0% +5.0% +6.0%

 

1.  DOE Report:

 

 

Weekly (bbl)

Year over Year

Crude

 -1,800,000 0%

Gasoline

 0 +8.6%

Distillates

 +1,800,000 +3.4%

Refinery  Yield:  N/A
Demand:  See below

2. Demand:
 

• The weekly report from MasterCard Spending Pulse on retail gasoline showed demand fell sharply last week after the Memorial Day holiday. Gasoline consumption dropped almost 6% from the previous week and was down almost 2% from the same week last year.
• U.S. jet fuel consumption dropped 3.5% in April from the previous month and was down 2.5% from April 2009, the Bureau of Transportation Statistics reported this past Tuesday.

3. Economic:
 

The U.S. Labor Department reported the U.S. economy created 431,000 nonfarm jobs in May, well short of the 500,000 expected by most analysts. More worrying, the vast majority of the new jobs came from temporary government hiring. The private sector created only 41,000 jobs, less than a fifth of the amount predicted by analysts. Much of that gain came from temporary service-sector jobs.  The unemployment rate slipped to 9.7% from 9.9% in April as the labour force contracted.


4. Other:
 

Hussein al-Shahristani claimed this past week that Iraq's oil production capacity is expected to more than quadruple to 12 million barrels a day by 2017 with up to a dozen deals with international oil companies awarded in recent years. Analysts, however, say the lack of a petrochemical law, ongoing insurgent attacks and uncertainty about who will lead the next government continue to be challenges to developing Iraq's oil sector.

 

Note:

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