MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
August 31, 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 18

$82.38
 

Aug 19

$82.26
 

Aug 22

$84.12
 

Aug 23

$85.44
 

Aug 24

$85.16
 

Aug 25

$85.30
 

Aug 26

$85.37
 

Aug 29

$87.27
 

Aug 30

$88.90
 
 
  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  $86.23  $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 30/11 $88.90 118.9 96.9 121.5
Aug 30/10 $74.70 96.9 76.3 101.6
YOY Diff. 14.20 +22.0 +20.6 +19.9
% Change +19% +23% +27% +20%

Commentary:

1. Platts Inventory Update:


The weekly U.S. Energy Department ("DOE") petroleum inventory assessment report, issued August 24, 2011 showed U.S. crude stocks with a decline of 2.213 million barrels. The inventory decline is attributed to a decline of imports and an increase in refinery output. Gasoline stocks showed an inventory build associated with improved levels of imports and strong refinery production. Implied demand for gasoline continues to show declines. Inventory of distillate product increased by 1.731 million barrels; however, this seasonal stock build was tempered by the pick up in U.S. demand for middle distillate products.


DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 -2,213,000 -1.8%
 

 Gasoline

 +1,355,000 -6.3%
 

Distillates

 +1,731,000 -11.5%


U.S. refineries capacity utilization increased 1.2 percent to 90.3 percent of capacity. As of August 29, many refineries on the Atlantic Coast have returned to normal following voluntary shut downs associated with Hurricane Irene.

2.  U.S. Economic Highlights:
 

  • MasterCard weekly SpendingPulse gasoline demand report ended Aug. 19 indicated that gasoline demand was down 4.2% compared with the same time last year.

  • A recently issued U.S. Commerce Department report showed U.S. consumer spending in July climbed 0.8 percent, the biggest gain since February, 2011. Federal Reserve Chairman, Ben Bernanke, disappointed many economists last week at the August

  • Federal Reserve meeting in Jackson Hole, Wyoming when he did not give an indication on possible actions the Federal Reserve is contemplating to improve economic conditions in the U.S. Chairman Bernanke did indicate that the September meeting will add an extra day to "think things over". Many economists believe August U.S. unemployment numbers, to be released this Friday, may motivate further action by the Federal Reserve.

  • U.S. consumer confidence index showed a steep decline in August (44.5), its lowest level since August 2009 (40.8), the height of the recent recession. A consumer confidence level of 90 indicates the economy is on solid footing. The consumer confidence index is a reflection of short term economic outlook.


3.  Other:
 

  • The economic turmoil occurring in several European nations appears to have taken a backstage to the unrest in Libya in terms of influencing market conditions. The energy market is awaiting signs that the Libyan oil industry is back online with expectations this will lower prices. The best oil location in Libya, the Serte basin, continues to experience significant unrest.

Note:

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