MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
June 30, 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):
June 17 $93.01 June 20 $93.26 June 21 $93.40
June 22 $95.41 June 23 $91.02 June 24 $91.16
June 27 $90.61 June 28 $92.99 June 29 $94.77
 
  Average Average Average
  2011 2010 2009
January  $89.44  $78.40 $41.96
February  $88.83  $76.16 $38.58
March  $102.74  $81.12  $47.96
April  $109.67  $84.46  $49.82
May  $101.29  $74.14  $55.96
June  $96.40  $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
         
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
June 28/11 $92.89 119.2 95.9 122.5
June 28/10 $78.25 99.8 74.3 98.9
YOY Diff. +14.64 +19.4 +21.6 +23.6
% Change +19% +19% +29% +24%

Commentary:

1. Platts Inventory Update:


The June 24, 2011 U.S. Department of Energy weekly report on petroleum inventories showed a larger than expected decline in stocks. Total U.S. petroleum stocks fell 4.38 million barrels to 359.5 million barrels in the latest petroleum inventory report. Analysts had expected stocks to decline by 1.5 million barrels. U.S. crude oil inventory decreased by 4.375 million barrels to a level of 359.5 million barrels. This level is at the upper limit of the average quantities for this time of year. Motor gasoline inventories decreased by 1.428 million barrels and sit in the middle of the average range of inventory for this time of year. U.S. distillate fuel inventories increased by 0.258 million barrels with inventory levels in the upper limit of the average inventory holdings for this time of year.


DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 -4,375,000 -0.1%
 

 Gasoline

 -1,428,000 -0.23%
 

Distillates

 +258,000 -10.74%


U.S. refineries operated at 88.1 percent of their operable capacity in the week ending June 24, 2011. There was a sharp decline in refinery gasoline output in the Atlantic Coast, Midwest and Gulf Coast regions, which analysts attribute to conscious decisions by refineries as opposed to technical operational issues. Implied demand, a measure of refinery production and inventory changes, for gasoline continues to show declines on both a weekly and four week moving average basis.


2.  U.S. Economic Highlights:
 

• MasterCard reports in its weekly Spending Pulse report that gasoline consumption was down 0.2 percent lower over previous week and the four week average. In addition, U.S. gasoline demand was 1.8 percent below year earlier levels.

• U.S. sales contracts for previously owned homes index rose 8.2 percent over April's index levels in a sign of potential improvements in the U.S. housing market.

3. Other:


• Greece government's budget restraint measures, with resulting political and social unrest, continues to cause volatility in European financial markets, including oil futures market. Greek budget austerity measures are necessary for that country to avoid defaults of bond debt. The European financial markets are keeping a close eye on the Greece situation as it is seen as a possible template for measures which several other European countries must embrace to avoid a similar situation. The success these counties have in getting their economies on track has broad implications to Europe's financial situation overall.

• OPEC has indicated that it may not increase production as previously reported due to the International Energy Agency's decision to release oil stockpiles.

• Tropical storm season has begun in the Caribbean with the first named storm in the Gulf of Mexico, Arlene. Tropical storms in the Gulf of Mexico can cause petroleum markets to fluctuate due to their potential to affect oil production and processing in this region.

Note:

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