MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
December 14, 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)
 

Dec 1

$100.20
 

Dec 2

$100.96
 

Dec 5

$100.99
 

Dec 6

$101.28
 

Dec 7

$100.49
 

Dec 8

$98.34
 

Dec 9

$99.41
 

Dec 12

$97.77
 

Dec 13

$100.14
 
 
  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 $99.95  $89.09  $73.88
         
  US $
Per Barrel		 CDN  Cents
Per Litre		 CDN Cents
Per Litre		 CDN Cents
Per Litre
  CRUDE RUL F/O DIESEL
Dec 9/11 $99.41 114.9 104.8 131.8
Dec 9/10 $88.37 105.7 84.8 110.0
YOY Diff. +11.04 +9.2 +20.0 +21.8
% Change +12% +9% +24% +20%

Commentary:

1. Platts Inventory Update:


The weekly U.S. Energy Department ("DOE") petroleum inventory assessment report, issued Dec 7, 2011 reported an increase in U.S. crude stocks mainly as a result of a rise in crude imports. With increased refinery operations, reflected in 3.1 percentage rise in refinery utilization, U.S. gasoline and distillate inventory levels also rose. However, U.S. Atlantic Coast distillate product, including heating oil inventory, continued to be below prior year levels (-19.87%).


DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 +1,336,000 -5.6%
 

 Gasoline

 +5,147,000 same
 

Distillates

 +2,533,000 -12.0%

2.  U.S Economic Highlights:
 
  • MasterCard's weekly SpendingPulse survey showed U.S. gasoline demand rose 1 percent for the weekend which included the U.S. Thanksgiving holiday. This was the highest level of gasoline demand in the U.S. since Aug. 26, 2011. However, calendar year 2011 gasoline demand is down 1.5 percent as of Dec. 2.
  • U.S. retail sales rose less than expected in November as reported by the U.S. Commerce Department. Analysts had expected a greater increase than the 0.2 percent reported. A drop in sales of food and beverages offset strong motor vehicle sales as reported by the U.S. Commerce Department.
  • Overall, economists in the U.S. are suggesting economic signals such as increased consumer confidence, improved small business confidence and the decline in the U.S. unemployment rate to 8.8 percent ease the fear of a second U.S. recession.

3.  Demand:
 
  • The European Union continues to debate the measures required for member countries to control budget and financial pressures. Last week Britain vetoed a plan which would see European Union member countries submit their nation's budget plan to Brussels for central review and limit the deficits nations may run.
  • Ahead of the weekly U.S. DOE petroleum inventory report, market analysts are expecting a decline in crude inventories while both gasoline and distillate inventories are expected to rise marginally. In recent weeks the weekly inventory reports appear to have less impact on petroleum commodity pricing than the European Union financial negotiations and restructuring proposals.

Note:

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