MARKET ANALYSIS
AS PREPARED BY COMMISSION STAFF
December 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)
 

Dec 16

$93.53
 

Dec 19

$93.88
 

Dec 20

$97.22
 

Dec 21

$98.67
 

Dec 22

$99.53
 

Dec 23

$99.68
 

Dec 27

$101.34
 

Dec 28

$99.36
 

Dec 29

$99.65
 
 
  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 $98.51  $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 28/11 $99.36 115.9 101.3 128.1
Dec 28/10 $91.49 107.5 86.3 112.7
YOY Diff. +7.87 +8.4 +15.0 +15.4
% Change +9% +8% +17% +14%

Commentary:

1. Platts Inventory Update:


The weekly U.S. Energy Department ("DOE") petroleum inventory assessment, issued Dec 29, 2011 reported an increase in U.S. crude stocks. Crude oil inventories rose by 3.9 million barrels, gasoline inventories fell by 700,000 barrels and distillate product (diesel and heating oil) inventories increased by 1.2 million barrels. However, U.S. Atlantic Coast distillate product inventory, which includes heating oil, continue to be below prior year levels (-16.26%).


DOE Report:

 

 

 

Weekly (bbl)

Year over Year
 

 Crude

 +3,900,000 -3.5%
 

 Gasoline

 -700,000 +1.3%
 

Distillates

 +1,200,000 -12.8%


The U.S. EIA noted this week that plans to idle U.S. Northeast refining capacity is likely to cause problems for supplies of petroleum products in this region. Sunoco and ConocoPhillips announced in September plans to sell three refineries that account for over half of U.S. Northeast refining capacity. Further information on the implications of these closures will be discussed by the U.S. EIA in a January 2012 report on the issue.

Latest DOE reports indicate U.S. refining utilization dropped 0.7 percent to 84.2, its lowest level in seven weeks.

2.  U.S Economic Highlights:
 
  • MasterCard's weekly SpendingPulse survey showed U.S. gasoline demand rose 7.7 percent compared with the previous week. However, gasoline demand is down 1.6 percent compared with the same week last year.
  • Consumer confidence in the U.S. retreated last week from a five-month high, showing an improvement in sentiment will take time to develop. The Bloomberg Consumer Comfort Index dropped to minus 47.5 in the period ended Dec. 24 from minus 45 the prior week, the highest reading since July. This gauge of the buying climate fell by the most in three months.
  • The U.S. National Weather Service's Climate Prediction Center forecast lower-than-normal temperatures Jan. 5-11 from Maine to Florida. This will provide strong demand for heating oil products which are currently experiencing lower inventory levels compared to past years on the U.S. Atlantic Coast.

3.  Other:
 
  • Tensions continue to increase in the Strait of Hormuz between Iran and the United States. Iran has said it would close off this body of water to shipping if countries opposed to its nuclear program instituted negative economic sanctions. The Strait of Hormuz provides marine passage for about a sixth of the world's global oil production. The U.S. Navy warned it would not allow any disruption to marine traffic in this area.

Note:

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