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MARKET
ANALYSIS
AS PREPARED BY COMMISSION STAFF
December 31, 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 December 30. |
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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. |
|
Charlottetown |
71.9 |
- |
44.5 |
- |
92.9 |
- |
64.3 |
- |
72.5 |
- |
69.0 |
- |
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Moncton |
69.3 |
-2.6 |
40.6 |
-3.9 |
94.4 |
+1.5 |
62.6 |
-1.7 |
76.7 |
+4.2 |
67.9 |
+1.1 |
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Halifax |
69.6 |
-2.3 |
36.1 |
-8.4 |
82.5 |
-10.4 |
53.6 |
-10.7 |
75.5 |
+3.0 |
71.9 |
+2.9 |
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Fredericton |
70.1 |
-1.8 |
41.3 |
-3.2 |
94.6 |
+1.7 |
62.8 |
-1.5 |
76.4 |
+3.9 |
67.6 |
-1.4 |
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St. John's |
85.2 |
+13.3 |
48.9 |
+4.4 |
96.7 |
+3.8 |
65.1 |
+0.8 |
75.3 |
+2.8 |
66.7 |
-2.3 |
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Crude Track (In U.S. $ per Barrel): |
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Dec. 17 |
$40.06 |
Dec. 18 |
$36.22 |
Dec. 19 |
$33.87 |
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Dec. 22 |
$39.91 |
Dec. 23 |
$38.98 |
Dec. 24 |
$35.35 |
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Dec. 26 |
$37.71 |
Dec. 29 |
$40.02 |
Dec. 30 |
$39.03 |
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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 |
$57.44 |
$94.95 |
$59.41 |
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December |
$42.17 |
$91.24 |
$62.09 |
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Commentary: |
Unfavourable economic news,
declining consumption and growing inventories continue to impact
global petroleum prices. Dramatic OPEC production cut backs and
renewed Middle East outbreaks of violence notwithstanding, the
price of crude oil continues to shrink in value. Indeed, while
late 2009 predictions of $70 per barrel price levels have been
made, some industry experts are anticipating $30 per barrel
crude prices in the short term.
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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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Dec. 28/08 |
$37.71 |
72.0 |
70.1 |
95.0 |
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Dec. 28/07 |
$96.00 |
107.7 |
88.7 |
115.6 |
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YOY Diff. |
-58.29 |
-35.7 |
-18.6 |
-20.6 |
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% Change |
-61% |
-33% |
-21% |
-18% |
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1. DOE Report - December 24, 2008: |
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Weekly (bbl) |
Year over
Year |
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Crude |
-3,100,000 |
+8.0% |
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Gasoline |
+3,300,000 |
+0.6% |
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Distillates |
+1,800,000 |
+6.8% |
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2. Economic News: |
• The U.S.
Commerce Dept. reported last week that "the gross domestic product, the
broadest measure of economic health, declined at an annual rate of 0.5%
in the July-September quarter. Corporate profits fell 1.2%".
• In the first decline in four months, personal income contracted 0.2%
in November.
• The U.S. Labour Department
reported on Tuesday that "new U.S. weekly jobless claims rose by 30,000
over the past week to 586,000" in another sign of economic weakness.
• Orders to U.S. factories for big ticket manufactured goods fell again
in November, reflecting further setbacks in the battered auto industry
and a big drop in demand for commercial aircraft.
• Consumption expenditures shrank
0.6% in the month before Christmas, its fifth consecutive decline
according to the Commerce Department.
• In
Japan, recession conditions deepened in November as companies cut
production at the fastest pace in 55 years and rising unemployment
prompted households to cut back on spending. Factory output plunged 8.1
% from October while the jobless rate climbed to 3.9% and household
spending slid 0.5% according to the trade ministry in Tokyo.
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3.
2009 Predictions: |
• Bloomberg analysts are predicting that oil futures may rebound from
their worst year to average $60 a barrel as OPEC makes record production
cuts to counter slumping oil revenues. The forecast represents the best
guess of 33 Bloomberg analysts who are giving much consideration to the
fact that this past year OPEC has committed to a pledged 14%, 4.2
million barrel a day production shrinkage. Bloomberg analysts also
project that oil prices will rise to $70 a barrel in the fourth quarter
as demand improves and OPEC production reductions fully impact global
supply.
• Goldman
Sachs Group are predicting a $45.00 per barrel 2009 average while
Deutsche Bank is calling for a $47.50 average. Both investment
houses are indicating that oil may go as low as $30 before bottoming
out.
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4.
Geo-political: |
Tensions related to the widening conflict between Israel and Palestinian
militants and to the ongoing conflict between India and Pakistan
resulted in crude prices rising in excess of $2.00 per barrel overnight
on Tuesday.
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Legend: |
| DOE |
Department of Energy |
| RUL |
Regular Unleaded Gasoline |
| F/O |
Furnace Oil |
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