MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
October 14, 2016

 

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 Crude (US$/bbl)
    WTI Brent
 

Oct 3

 $ 48.81

$ 50.89
 

Oct 4

 $ 48.69

$ 50.87
 

Oct 5

 $ 49.83

$ 51.86
 

Oct 6

 $ 50.44

$ 52.51
 

Oct 7

 $ 49.81

$ 51.93
 

Oct 10

 $ 51.35

$ 53.14
 

Oct 11

 $ 50.79

$ 52.41
 

Oct 12

 $ 50.18

$ 51.81
 

Oct 13

 $ 50.44

$ 52.03
 Average Brent Crude for October: $ 51.94.
 
West Texas Intermediate
  Average Average Average Average
  2016 2015 2014 2013
January  $ 31.78  $ 47.56  $ 94.73  $ 94.70
February  $ 30.62  $ 50.78  $100.57  $ 95.50
March  $ 37.96  $ 47.87  $100.46  $ 92.73
April  $ 41.12  $ 54.63  $102.15  $ 89.59
May  $ 46.80  $ 59.37  $101.79  $ 94.93
June  $ 48.85 $ 59.76  $105.14  $ 95.76
July  $ 44.95 $ 50.93 $102.39  $104.68
August  $ 44.80 $ 42.89 $ 96.08  $106.49
September  $ 45.23 $ 45.48 $ 93.03  $106.24
October  $ 50.04 $ 46.29 $ 84.52  $100.74
November   $ 42.94 $ 77.55  $ 94.00
December   $ 37.33 $ 59.82  $ 97.87
         
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Oct 12/16 $ 50.18 104.1 75.3 107.4
Oct 12/15 $ 47.10 100.7 79.9 113.9
YOY Diff. +3.08 +3.4 -4.6 -6.5
% Change +6.5% +3.4% -5.8% -5.7%

Commentary:


Both Brent and WTI crude prices continued to rise over the past two weeks as ongoing speculation over the ultimate success of an OPEC initiative to curb member nation production thereby addressing global crude surpluses continued to influence market dynamics.  The emergence of Russia as a supporter of the OPEC plan further underpinned market pricing though a strengthening US dollar ended to curb price escalation.

With regard to refined products, the onset of winter blending and the prospect of colder weather has served to significantly impact distillate pricing.  High demand related to seasonal harvesting activities further pressured distillate pricing.  With the end of maintenance season in sight and the related return to full production of the refining industry, gasoline prices should stabilize going forward.  Gasoline prices had been impacted in recent weeks by both reduced production and supply interruptions.  The return to service of the Colonial Pipeline coupled with reduced seasonal demand should serve to exert a downward pressure on gasoline prices in the near future.

 

Economic Data:

1.  Platts Inventory Update:

The US Energy Department ("DOE") weekly petroleum inventory assessment, issued October 12, 2016, reported an increase in US crude stocks of 4,850,000 barrels.

US gasoline inventories decreased by 1,905,000 barrels over the previous reporting period.  Implied demand decreased by 126,000 b/d.
 
US distillate inventories decreased by 3,720,000 barrels.  


US refinery utilization rates decreased by 2.8% to 85.5% of capacity.

 

 

Weekly
(bbl)

Year over Year
% Change

Crude

 +4,850,000 +1.2%

Gasoline

 -1,905,000 +1.9%

Distillates

 -3,720,000 +6.3%
Source: DOE October 12, 2016
 

Note:

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