MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
September 14, 2012

 

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:
  Recent WTI Crude (US$/bbl)
 

Aug 31

$96.47
 

Sep 4

$95.30
 

Sep 5

$95.36
 

Sep 6

$95.53
 

Sep 7

$96.42
 

Sep 10

$96.54
 

Sep 11

$97.17
 

Sep 12

$97.01
 

Sep 13

$98.31
 Average Brent Crude for Aug $114.75
 
  Average Average Average
  2012 2011 2010
January  $100.51  $89.44  $78.40
February  $102.26  $88.83  $76.16
March  $106.36  $102.74  $81.12
April  $103.18  $109.67  $84.46
May  $ 95.47  $101.29  $74.14
June  $ 82.28  $96.40  $75.39
July  $ 87.93  $97.43  $73.95
August  $ 94.05  $86.23  $77.00
September  $ 96.45  $86.13  $75.55
October   $86.10  $81.99
November   $96.86  $84.25
December   $98.51  $89.09
         
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Sep 12/12 $ 97.01 129.2 105.3 130.5
Sep 12/11 $ 88.19 123.1 99.9 125.2
YOY Diff. +8.82 +6.1 +5.4 +5.3
% Change +10.0% +5.0% +5.0% +4.0%

Commentary:

1. Platts Inventory Update:


As of September 12, 2012, U.S. crude inventory levels rose by 1.994 million barrels over the previous report on inventory levels.  Crude stocks rose despite some lag in the restart of Gulf of Mexico production subsequent to Hurricane Isaac shut downs. Crude oil inventories at this time are 8% above the five year average for this period.  U.S. gasoline stocks fell by 1.177 million barrels over the previous report.  The decline in Gulf Coast production due to Hurricane Isaac was partially responsible for the inventory decline.  Distillate product stocks rose by 1.476 million barrels despite declines in Gulf Coast production.  Encouragingly, the distillate stock build was led by Atlantic Coast production.  Atlantic Coast heating oil stocks did rise by 847,000 barrels.  Distillate product stock on the Atlantic Coast is 17.221 million barrels below prior year levels.  


DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 +1,994,000 +3.7%
 

 Gasoline

 -1,177,000 -6.2%
 

Distillates

 +1,476,000 -18.9%

2.  U.S Economic Highlights:
 

  • The most recently issued MasterCard Spending Pulse report noted an increase in gasoline demand by 1.9%, a 14 week high which MasterCard attributes to Labor Day weekend travel.  Gasoline consumption was 4.2 percent above the year-earlier level.

  • The Federal Reserve appears set to launch a third round of unconventional monetary stimulus while signaling that a weak economy may warrant ultra-low interest rates for at least another three years.

  • Federal Reserve Chairman Ben Bernanke has commented that the central bank will not sit idly by while unemployment, currently at 8.1 percent, remains so far above levels consistent with a healthy economic recovery.

  • U.S. economic growth cooled in the second quarter, coming in at a tepid 1.7 percent annual rate, and forecasters do not believe it is doing much better now.

  • Employment data showed just 96,000 jobs were created last month, less than needed to keep up with population growth, hardening forecasts of an aggressive Fed move.

3.  Others:
 

  • Europe has cleared more obstacles on the road to containing its sovereign debt crisis and stabilising the euro zone after Germany's constitutional court allowed a permanent bailout fund to go ahead and the Dutch voted for pro-European parties.

  • Coupled with a European Central Bank decision to buy short-term bonds of states that apply for assistance and abide by strict conditions, and with EU proposals for a single euro zone banking supervisor, the ruling clears the way for a concerted effort to draw a line under the crisis.

Note:

Legend:
DOE Department of Energy
RUL Regular Unleaded Gasoline
F/O Furnace Oil
WTI West Texas Intermediate