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MARKET
ANALYSIS
AS PREPARED BY COMMISSION STAFF
November 28, 2008
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.
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Pump
Price Comparison:
As of November 25. |
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Gasoline |
Diesel |
Furnace Oil |
| |
Pump
Price |
Diff. |
Ex. Tax |
Diff. |
Pump
Price |
Diff. |
Ex. Tax |
Diff. |
Pump
Price |
Diff. |
Ex. Tax |
Diff. |
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Charlottetown |
80.9 |
- |
51.6 |
- |
107.1 |
- |
77.8 |
- |
85.4 |
- |
81.3 |
- |
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Moncton |
81.9 |
+1.0 |
51.8 |
+0.2 |
108.9 |
+1.8 |
75.4 |
-2.4 |
94.9 |
+9.5 |
84.0 |
+2.7 |
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Halifax |
81.5 |
+0.6 |
46.6 |
-5.0 |
99.8 |
-7.3 |
68.9 |
-8.9 |
88.5 |
+3.1 |
84.3 |
+3.0 |
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Fredericton |
80.3 |
-0.6 |
50.4 |
-1.2 |
109.2 |
+2.1 |
75.7 |
-2.1 |
92.9 |
+7.5 |
82.3 |
+1.0 |
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St. John's |
92.7 |
+11.8 |
55.5 |
+3.9 |
112.4 |
+5.3 |
79.0 |
+1.2 |
91.0 |
+5.6 |
80.5 |
+0.8 |
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Crude Track (In U.S. $ per Barrel): |
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Nov. 17 |
$54.95 |
Nov. 18 |
$54.39 |
Nov. 19 |
$53.62 |
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Nov. 20 |
$49.62 |
Nov. 21 |
$49.93 |
Nov. 24 |
$54.50 |
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Nov. 25 |
$50.77 |
Nov. 26 |
$54.44 |
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Average |
Average |
Average |
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2008 |
2007 |
2006 |
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January |
$93.06 |
$54.43 |
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February |
$95.34 |
$59.42 |
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March |
$105.62 |
$60.86 |
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April |
$110.72 |
$64.08 |
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May |
$124.98 |
$63.54 |
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June |
$134.02 |
$67.46 |
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July |
$134.29 |
$73.80 |
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August |
$116.81 |
$72.17 |
$73.10 |
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September |
$104.27 |
$79.52 |
$63.89 |
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October |
$76.72 |
$85.19 |
$59.20 |
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November |
$57.79 |
$94.95 |
$59.41 |
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December |
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$91.24 |
$62.09 |
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Commentary: |
Crude prices started and ended the
past two week period at the $54 per barrel level. Amidst
conflicting market information ranging from continued
unfavourable economic news and sustained reduction in consumer
demand to threats of impending OPEC and Russian production
cutbacks, the market struggled to find its direction. With the
full extent of the global financial crisis not yet known, some
analysts were even talking of $25 per barrel oil by February.
Notwithstanding, the relatively low inventory levels currently
being carried due to existing market economics have resulted in
isolated price spikes making refined market pricing difficult to
predict. In addition, the relative weakness of the Canadian
dollar has tempered the fall of refined product pricing here in
Atlantic Canada.
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US $
Per Barrel |
CDN
Cents
Per Litre |
CDN Cents
Per Litre |
CDN Cents
Per Litre |
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CRUDE |
RUL |
F/O |
DIESEL |
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Nov 22/08 |
$49.93 |
80.9 |
82.4 |
107.1 |
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Nov 22/07 |
$97.29 |
107.7 |
85.7 |
112.5 |
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YOY Diff. |
-$47.36 |
-26.8 |
-3.3 |
-5.4 |
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% Change |
-49% |
-25% |
-4% |
-4.8% |
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1. DOE Report - November 26, 2008: |
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Weekly (bbl) |
Year over
Year |
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Crude |
+7,300,000 |
+2.4% |
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Gasoline |
+1,900,000 |
+1.9% |
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Distillates |
-200,000 |
-3.2% |
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Demand:
Gasoline demand down by 2.8% year over year. |
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2. Economic News: |
• The Conference Board
reported this week that its Consumer confidence index now stands at
44.9, up from a revised 38.8 in October. Last month's reading was the
lowest since the research group started tracking the index in 1967.
• The Standard & Poor's/Case-Shiller U.S. National Home Price Index
tumbled a record 16.6 percent during the quarter from the same period a
year ago. Prices are at levels not seen since the first quarter of 2004.
• The U.S. government reported on Tuesday that the nation's gross
domestic product in the U.S. shrank 0.5 percent in the third quarter,
which was worse than expected. It was the worst showing since the
economy contracted 1.4 percent in the third quarter of 2001, during the
last recession.
• On Tuesday, the Paris based Organization for Economic Cooperation and
Development said economic output would likely shrink by 0.4 percent in
2009 for the 30 market democracies that make up its membership, against
the 1.4 percent growth prediction for 2008.
• The Organization for Economic Development predicted this week that
eight million people in its 30 country membership will be out of work
next year as a direct result of the current global financial crisis.
• U.S. Commerce Dept. reported on Wednesday that consumer spending
plunged by 1% last month.
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3.
Weather Predictions: |
• U.S. private weather forecaster WSI predicted this week that all
regions of the U.S. except for the Southwest will likely experience
below-normal temperatures over the three month period starting December
1. For December, much colder than normal weather is expected in New York
and New England during the month.
• In accompanying market commentary, consultant Energy Security Analysis
Inc. said that the early cold weather will likely lead to stronger
natural gas and power prices that may prompt some to switch to fuel oil
if crude prices remain soft.
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4.
Demand: |
• Master Card advised on Tuesday that during the four week period ended
Nov 21 retail gasoline sales were down 3% year over year, though a
nominal increase over the previous week was noted.
• EIA reported on Wednesday that demand for gasoline is down 2.8% year
over year.
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5.
OPEC: |
OPEC has meetings scheduled for
November 29th and for December 17th. While a production cut announcement
is not anticipated for the November meeting, it is widely anticipated
that the December meeting will include a call for reduced member
production quotas. Recently, Russian Energy Minister Sergei Shmatko
announced that Russia intends to coordinate its investments and
policies with OPEC in an attempt to shore up world oil prices.
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Legend: |
| DOE |
Department of Energy |
| RUL |
Regular Unleaded Gasoline |
| F/O |
Furnace Oil |
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