MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
November 30, 2011

 

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)
 

Nov 16

$102.59
 

Nov 17

$98.82
 

Nov 18

$97.41
 

Nov 21

$96.92
 

Nov 22

$98.01
 

Nov 23

$96.17
 

Nov 25

$96.77
 

Nov 28

$98.21
 

Nov 29

$99.79
 
 
  Average Average Average
  2011 2010 2009
January  $89.44  $78.40 $41.96
February  $88.83  $76.16 $38.58
March  $102.74  $81.12  $47.96
April  $109.67  $84.46  $49.82
May  $101.29  $74.14  $55.96
June  $96.40  $75.39  $69.60
July  $97.43  $73.95  $63.93
August  $86.23  $77.00  $71.04
September  $86.13  $75.55  $69.08
October $86.10  $81.99  $75.56
November $96.86  $84.25  $78.31
December    $89.09  $73.88
         
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Nov 28/11 $98.21 117.5 107.4 134.9
Nov 28/10 $85.73 103.6 84.8 110.0
YOY Diff. +12.48 +13.9 +22.6 +24.9
% Change +15% +13% +27% +23%

Commentary:

1. Platts Inventory Update:


The weekly U.S. Energy Department ("DOE") petroleum inventory assessment report, issued November 23, 2011 reported a decline in U.S. crude stocks, mainly a result of a decline in crude imports and increased refinery production runs. U.S. gasoline stocks increased 4.475 million barrels with higher imports and increased refinery operations more than offsetting the demand requirements. U.S. distillate product stock continues to fall even with the increased refinery output. Of note, U.S. Atlantic Coast (USAC) heating oil stocks continue to show declines with inventories 4.3% lower than this time last week and 23.38% and 28.45% below 2010 and 2009 levels.


DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 -6,219,000 -7.8%
 

 Gasoline

 -4,475,000 same
 

Distillates

 -770,000 -16.0%

2.  U.S Economic Highlights:
 
  •  MasterCard's weekly SpendingPulse survey showed U.S. gasoline demand below year-earlier levels for the 12th consecutive time last week, down 4.5 percent from 2010. Gasoline use in 2011 through Nov. 11 is down 1.4 percent from a year earlier.
  • American Airlines, a major U.S. carrier, filed for bankruptcy protection citing soaring costs for fuel and weakening travel demand. It was the only American major airline to have avoided bankruptcy in the past decade. The airline hopes that cost cutting, such as reduced labour costs, can be obtained through the bankruptcy proceedings.
  • U.S. retail sales showed strong signs of consumer confidence with both Black Friday and Cyber Monday showing record level sales results.

3.  Demand:
 
  • The recent volatile trend of world financial markets for equities and commodities has continued since our last report on Nov. 14, 2011. Mixed signals from this week's Italian bond offerings indicate market volatility will continue. This week Italy had to offer 3 yr bonds at 7.89 percent vs 4.93 percent for similar bonds issued in October. Italian 10 year bonds offered yielded 7.56 percent vs 6.06 for similar bonds issued in October. However, demand for these bonds was strong indicating investors had some confidence in the Italian plans.
  •  It is anticipated that the weekly U.S. Department of Energy ("DOE") petroleum inventory report will show a build in crude and gasoline inventories. At this point it is difficult to predict how the weekly DOE product inventory report will influence petroleum markets for the rest of the week.

Note:

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