MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
November 12, 2010

 

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):
Nov 1 $82.95 Nov 2 $83.90 Nov 3 $84.69
Nov 4 $86.49 Nov 5 $86.85 Nov 8 $87.06
Nov 9 $86.72 Nov 10 $87.81 Nov 11 $87.81
 
  Average Average Average
  2010 2009 2008
January  $78.40 $41.96 $93.06
February  $76.16 $38.58 $95.34
March  $81.12  $47.96 $105.62
April  $84.46  $49.82 $110.72
May  $74.14  $55.96 $124.98
June  $75.39  $69.60 $134.02
July  $73.95  $63.93 $134.29
August  $77.00  $71.04 $116.81
September  $75.55  $69.08 $104.27
October  $81.99  $75.56 $76.72
November  $86.03  $78.31 $57.44
December    $73.88 $42.17

Commentary:


Crude prices have floated steadily upward since the first of the month and have been influenced primarily by the market's anticipation of the impact of the U.S. federal government's latest economic stimulus plan whereby $600 billion will be injected into the U.S. economy. Concern has been expressed that the measure will not only stimulate economic activity and therefore demand but also it may serve to undermine the value of the U.S. dollar, thereby inflating oil prices. Refined product prices, as of late, have been influenced by a combination of reduced, maintenance related, production and reduced imports due largely to refinery production interruption in France. The onset of colder weather in recent days with its related increased demand for furnace oil is also impacting distillate prices.

 
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Nov 9/10       $86.72 101.0 81.8 106.4
Nov 9/09 $79.43 104.7 79.8 102.2
YOY Diff. +7.29 -3.7 +2.0 +4.2
% Change +9.0% -3.5% +2.5% +4.0%

 

1.  DOE Report:

 

 

Weekly (bbl)

Year over Year

Crude

 -3,300,0000 +8.0%

Gasoline

 -1,900,000 -0.2%

Distillates

 -5,000,000 -4.7%

Propane

 -636,000 -6.0%
Refinery Yield

N/A

  
Demand

See Below

  

2. Demand:
 
  • According to Bloomberg, China, the world's biggest energy user, cut net crude oil imports to the lowest level in 18 months as refiners drew on inventories because of higher global crude prices. Net purchases were 16.1 million metric tons last month or 3.8 million barrels a day according to customs data released in Beijing on Tuesday. That's the lowest amount since May 2009 and down from the all time high of 22.9 million tons in September.
  • In its long term energy outlook, the International Energy Agency last week predicted that global oil supplies will near a peak by 2035 and that oil prices might exceed $100 a barrel in 2015 and $200 in 2035.
  • Goldman Sachs predicted this week that oil prices will be substantially higher by 2012 as the global stockpile surplus shrinks and excess production capacity drops. Global economic growth will drive oil demand and reduce inventories which at this point are exceptionally high in developed countries including the U.S.

3. Economic:
 
  • The U.S. Federal government announced on Friday its plans to implement quantitative easing by the purchasing of $600 billion in U.S. Treasury Bonds in a move which experts say will serve to 1) stimulate the economy and 2) undermine the value of the U.S. dollar. A lowering of the dollar typically serves to increase global crude prices.
  • The U.S. Labor Department reported on Monday that U.S. employers added 151,000 jobs last month, representing the first net gain in five months. The overall unemployment rate, however, remained at 9.6%.

Note:

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