MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
October 31, 2013

 

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)
 

Oct 18

$100.81
 

Oct 21

$ 99.22
 

Oct 22

$ 97.80
 

Oct 23

$ 96.86
 

Oct 24

$ 97.11
 

Oct 25

$ 97.85
 

Oct 28

$ 98.68
 

Oct 29

$ 98.20
 

Oct 30

$ 96.77
 Average Brent Crude for October: $109.47.
 
  Average Average Average
  2013 2012 2011
January  $ 94.70  $100.51  $89.44
February  $ 95.50  $102.26  $88.83
March  $ 92.73  $106.36  $102.74
April  $ 89.59  $103.18  $109.67
May  $ 94.93  $ 95.47  $101.29
June  $ 95.76  $ 82.28  $96.40
July  $104.68  $ 87.93  $97.43
August  $106.49  $ 94.05  $86.23
September  $108.47  $ 94.74  $86.13
October  $100.74  $ 89.72 $86.10
November    $ 85.87 $96.86
December    $ 88.06 $98.51
         
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Oct 29/13 $ 98.20 127.2 105.8 143.2
Oct 29/12 $ 85.54 121.0 109.3 134.7
YOY Diff. +12.66 + 6.2 -3.5 +8.5
% Change +14.8% +5.1% -3.2% +6.3%

Commentary:

 

Crude prices have fallen approximately 3% to sub $100 per barrel levels over the past 10 days as increased inventories coupled with weak global economic performance and related anemic global demand have impacted market dynamics. Shale oil extraction activities from Bakken, North Dakota and Eagle Ford, Texas oil fields continue to produce domestic crude at greater than anticipated rates thus contributing to the inventory builds observed. A U.S. Commerce Department reported retail sales decline of 0.1% in September (vs an expected 0.2% gain) and market apprehension over the Federal Reserve’s commitment to continue its economy supporting bond buy-back program weighed on crude price performance.  

While refined product wholesale pricing has been relatively stable, an increase in implied demand this past week coupled with reduced supply due to seasonal refinery maintenance has exerted an upward pressure on gasoline prices. Additionally, continued strong export sales of ULSD combined with the RIN program induced substitution of furnace for diesel has served to pressure distillate prices.


Economic Data:


Platts Inventory Update:

The US Energy Department ("DOE") weekly petroleum inventory assessment, issued October 30, 2013, reported an increase in US crude stocks of 4,100,000 barrels.

US gasoline inventories decreased by 1,700,000 barrels over the previous reporting period. Implied gasoline demand decreased in this reporting period by 257,000 b/d.

 US distillate inventories decreased by 3,100,000 barrels.

 Refinery utilization increased to 87.3% of production capacity.

DOE Report:

 

 

 

Weekly
(bbl)

Year over Year
% Change
 

Crude

 +4,100,000 +2.9%
 

Gasoline

 -1,700,000 +7.2%
 

Distillates

 -3,100,000 +4.1%
Source: DOE October 30, 2013

 

Note:

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