MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
August 12, 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):
  Recent Crude (US$/bbl)
 

Aug 1

$94.89
 

Aug 2

$93.79
 

Aug 3

$91.93
 

Aug 4

$86.63
 

Aug 5

$86.88
 

Aug 8

$81.31
 

Aug 9

$79.30
 

Aug 10

$82.89
 

Aug 11

$85.72
 
 
  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  $97.43  $73.95  $63.93
August  $87.20  $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
Aug 10/11 $82.89 118.9 96.9 121.5
Aug 10/10 $80.25 99.4 76.3 100.1
YOY Diff. +2.64 +19.5 +20.6 +21.4
% Change +3% +20% +27% +21%

Commentary:

1. Platts Inventory Update:


The weekly US Energy Department ("DOE") petroleum inventory assessment report, issued August 10, 2011, showed US crude stocks with a decline of 7.719 million barrels. The inventory decline occurred despite the release of 2.495 million barrels from the US Strategic Petroleum reserve. Many analysts had predicted an increase in US crude stocks. Petroleum product stocks, both gasoline and distillate, also declined in the most recent inventory reporting period. Gasoline stocks fell 1.588 million barrels over the past week while distillate stocks fell 737,000 barrels. A drop in imports of crude and refined product is noted as the cause of product stock declines overall.


DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 -5,225,000 -1.5%
 

 Gasoline

 -1,588,000 -4.4%
 

Distillates

 -737,000 -12.5%


U.S. refineries utilization increased 0.7 percent to 90.0 percent of capacity.


2.  U.S. Economic Highlights:
 

  • MasterCard, in its weekly Spending Pulse report, states that gasoline four-week average demand fell 2.2 percent over year earlier levels. MasterCard notes that this marks the 20th straight decline for the four-week average. Mastercard states that gasoline demand in July was the lowest on its records and attributes this decline to high gasoline prices, economic uncertainty and the fear of a double-dip recession.

  • US employment information released August 11, 2011 showed new claims for unemployment insurance payments unexpectedly fell. In addition, the number of people on the unemployment rolls and those getting extended payments also dropped. Many analysts suggest that companies have slowed the pace of firings this year and have been reluctant to boost hiring's due to the negative economic signals occurring.

  • The US trade deficit increased in June to the highest level since October 2008. The trade deficit was driven by a sharp decline in US exports, the largest in more than two years.

  • The US Federal Reserve announcement this week, which stated the near zero benchmark lending rate will continue till mid-2013, was further evidence of the slowing US economy.

3.  Other:
 

  • Continued economic uncertainties persist in Europe with France and Germany governments and banking system reacting to their financial situation as a result of potential lending defaults from countries such as Spain and Italy.

Note:

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