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MARKET
ANALYSIS
AS PREPARED BY COMMISSION STAFF
August 14, 2008
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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Pump
Price Comparison:
As of August 12, 2008. |
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Gasoline |
Diesel |
Furnace Oil |
| |
Pump
Price |
Diff. |
Ex. Tax |
Diff. |
Pump
Price |
Diff. |
Ex. Tax |
Diff. |
Pump
Price |
Diff. |
Ex. Tax. |
Diff. |
|
Charlottetown |
129.7 |
- |
97.7 |
- |
146.5 |
- |
115.3 |
- |
122.7 |
- |
116.9 |
- |
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Moncton |
128.0 |
-1.7 |
92.6 |
-5.1 |
144.7 |
-1.8 |
107.2 |
-8.1 |
129.9 |
+7.2 |
114.9 |
-2.0 |
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Halifax |
130.9 |
+1.2 |
90.3 |
-7.4 |
139.0 |
-7.5 |
103.6 |
-11.7 |
124.0 |
+1.3 |
118.1 |
+1.2 |
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Fredericton |
127.9 |
-1.8 |
92.4 |
-5.3 |
144.2 |
-2.3 |
106.7 |
-8.6 |
128.8 |
+6.1 |
114.0 |
-2.9 |
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St. John's |
136.6 |
+6.9 |
94.4 |
-3.3 |
152.7 |
+6.2 |
114.6 |
-0.7 |
127.1 |
+4.4 |
112.5 |
-4.4 |
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Crude Track (In U.S. $ per Barrel):
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| Aug 1 |
$125.10 |
Aug 4 |
$121.41 |
Aug 5 |
$119.17 |
| Aug 6 |
$118.58 |
Aug 7 |
$120.02 |
Aug 8 |
$115.20 |
| Aug 11 |
$114.45 |
Aug 12 |
$113.01 |
Aug 13 |
$116.00 |
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Average |
Average |
Average |
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2008 |
2007 |
2006 |
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January |
$93.06 |
$54.43 |
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February |
$95.34 |
$59.42 |
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March |
$105.62 |
$60.86 |
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April |
$110.72 |
$64.08 |
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May |
$124.98 |
$63.54 |
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June |
$134.02 |
$67.46 |
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July |
$134.29 |
$73.80 |
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August |
$118.37 |
$72.17 |
$73.10 |
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September |
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$79.52 |
$63.89 |
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October |
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$85.19 |
$59.20 |
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November |
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$94.95 |
$59.41 |
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December |
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$91.24 |
$62.09 |
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Commentary: |
The dramatic fall in the
price of crude has continued now for almost a month having
dropped from an historic high of $145.18 on July 14th to $113.01
on August 12th. The steadily rising value of the U.S. dollar,
the documented reduction in demand that has occurred
particularly in North America and Europe and the relatively calm
global geo-political scene experienced as of late have all
contributed to this pronounced deflation in crude trading
values. While, in general, the fall of crude has resulted in
lower refined product costs over the past month, as of late,
gasoline spot market prices in particular have moved in an
opposite direction. Low refiner margins combined with reduced
demand and continued high input costs, with refiners still
processing 60 day old $140 crude, have caused refineries to
dramatically cut back on production negatively impacting
gasoline prices.
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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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August 11/08 |
$114.45 |
129.7 |
117.0 |
147.5 |
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August 11/07 |
$71.47 |
103.2 |
74.3 |
104.0 |
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YOY Diff. |
42.98 |
26.5 |
42.7 |
43.5 |
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% Change |
+60% |
+26% |
+57% |
+42% |
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1. DOE Report - August 13, 2008: |
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Weekly (bbl) |
Year over
Year |
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Crude |
-400,000 |
-11.5% |
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Gasoline |
-6,400,000 |
+0.5% |
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Distillates |
-1,700,000 |
+3.1% |
Refinery Yield: 87% vs an average level of 93.6%
in the same week over the past 7 years. |
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Demand:
Gasoline demand down 2% YOY. |
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• The International Energy Agency on Tuesday updated its estimates on
current global supply and demand. The agency is now projecting demand
for 2008 at 86.9 million barrels per day. Global supply in July
according to the IEA amounted to 87.8 million bpd, up 890,000 bpd from
the previous month. Interestingly enough the IEA predicts global demand
next year to be at 87.8 million bpd, explaining that while demand in
North America and Europe will likely continue to soften, demand in Asia
is anticipated to increase by 3.8%. Demand for oil in China alone
amounted to 8.3 million bpd in June of this year.
• The U.S. Department of Energy reported on Tuesday that oil demand in
the U.S. in the first half of 2008 has fallen by an average of 800,000
bpd from the same period last year representing the biggest drop in 26
years and the biggest decline since consumption tumbled during a
recession in the early 1980's.
• China reported on Monday that its crude imports had fallen by 7% in
July vs July of last year. The report has raised questions as to whether
the economic slowdown currently affecting the U.S. and Europe is
beginning to dampen economic activities in Asia as well.
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• On Friday, Kurdish rebels claimed responsibility for Tuesday's
blast on the Baku-Ceyhan pipeline in Eastern Turkey which is expected to
leave the pipeline shut for up to two weeks. The pipeline is an
important European transshipment channel through which flows
approximately 1 million barrels of crude daily.
• Iraq has announced that it will resume oil exploration
activities after a break lasting in excess of 20 years and due mostly to
crippling U.N. sanctions because of the country's previous military
activities. In addition, the country intends to increase daily output by
500,000 bpd from the current average production of 2.5 million bpd. Oil
ministry officials indicate their desire to raise capacity over the next
5 years to 4.5 million bpd.
• On Friday, Italy became the first member of the 15 nation Euro zone to
announce that its economy had contracted in the 2nd quarter.
• The U.S. Federal Highway service reported this week that Americans
drove 12.2 billion fewer miles or 4.7% less than in the same month last
year.
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Legend: |
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DOE |
Department of Energy |
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RUL |
Regular Unleaded Gasoline |
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F/O |
Furnace Oil |
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