Scotiabank's Commodity Price Index, which measures price trends in 32 of Canada's major exports, surged to new heights in May, climbing 3.9 percent month-over-month, the fifth consecutive record in as many months in 2008.
The Oil and Gas Index led the way in May, surging 10.5 percent month-over-month and 65.9 percent year-over-year. Energy prices strengthened across the board, with Canadian natural gas export prices climbing over US$10.60 per thousand cubic feet (mcf), pushed up by record oil prices. West Texas Intermediate (WTI) oil soared to new heights of US$139.12 per barrel in intraday Nymex trading on June 6, alongside Middle East tensions, linked to Iran's refusal to end its uranium enrichment, and a world supply system with only limited spare capacity to offset supply disruptions. Prices touched an even higher US$139.89 on June 16 alongside a soft U.S. dollar.
"In an effort to calm world oil markets, Saudi Arabia has invited major oil consumers and producers to a meeting on June 22 to discuss measures which might be taken to curb soaring oil prices," said Patricia Mohr, Vice-President, Economics and Commodity Market Specialist at Scotiabank.
"While the Kingdom will reportedly boost output temporarily to cool prices, this development does not address the underlying reason for record oil prices, limited exploration access by oil companies, particularly foreign oil companies, in many areas of the world including Russia, contributing to only slow new field development outside of OPEC."
Saudi Arabia began to boost output by 300,000 barrels per day in mid-May towards a target of 9.45 million barrels per day (mb/d) by June and is reportedly mulling a further increase to about 9.7 mb/d, possibly announced at its oil summit, for an overall increase of 500-550,000 b/d. If implemented, the Kingdom's output will climb to 91 percent of its maximum sustainable production capacity (10.65 mb/d) and capacity utilization across the cartel will rise to 93.8 percent.
Source: Scotiabank Economics Reports
What it Means:
Not much relief in site - hopefully, just a calming down of the markets and a more stabile oil-pricing environment. Key sentence: "...Kingdom's output will climb to 91 percent of its maximum sustainable production capacity."
So, the thinking is, if this won't work, then what? The geopolitical situation is not easing up, and new fields won't come into production very soon.
In the meantime, producing oilfields in Mexico and Norway are running out of oil while US inventories are below their five-year average.
Despite China's announcement of rising its fuel prices by 18% and Iraq's possible increased output, adding to the existing pressure, this week's US massive floods have seriously compromised the ethanol production for the near future. And talking about a perfect storm, the hurricane season - June 1 to Nov. 30 - in the Gulf of Mexico oil belt has just started. According to the latest analysis and prognosis, the relatively quiet seasons of 2006 and 2007 will not be replicated this year: Forecasters predicts that the 2008 season may produce a higher-than-normal number of storms.
At best, expect the current high oil prices throughout the summer...
Read More
Read More
Read More
Read More
Read More
STRATEGIC/MACRO DAILY INFORMATION for Canadian automotive business
TJAAautoinfo FASTWEBLINK
Monday - Feb. 06, 2012
FOCUS: GM aims for 10 percent profit margin over next few years: report - Reuters
ECONOMIC FUNDAMENTALS: Chinese economic growth at risk from European downturn - Guardian
ECONOMIC FUNDAMENTALS II: Greece lets another deadline slip in bailout poker - Reuters
CANADA
GM, Bullfrog team to make Volt greener - ReportonBusiness
OAS battle no retirement crisis - FinancialPost
INTERNATIONAL
Chrysler draws praise for Clint Eastwood ad touting U.S. turnaround - Det.News
US: Dealer Calls for Auto Makers to Boost Margins - Wards
World Car of the Year: The top 10 - Telegraph
Suzuki Motor 9-month profit dips - MarketWatch
GM doesn't pull Super Bowl ad that tweaks Ford - Det.News
Friday - Feb. 03, 2012
FOCUS: Toyota expects global 2012 sales to rise 21% - MarketWatch
ECONOMIC FUNDAMENTALS: China cabinet economist warns of "deflation" in 2012 - Reuters
CANADA
Ottawa leans on banks to tighten lending - ReportonBusiness
Canada's jobless rate rises - FinancialPost
INTERNATIONAL
Toyota's January China sales down 25% - MarketWatch
South Korea to get more Fords - Det.News
Major South American Markets Saw Mostly Positive Results in 2011 - Wards
Daimler's Mercedes-Benz Jan. global sales up 5.8% - MarketWatch
Thursday - Feb. 02, 2012
FOCUS: USA: Consumer demand, optimistic economic signals help Jan. auto sales - Det.News
ECONOMIC FUNDAMENTALS: Worst yet to come for China growth: economist - Reuters
CANADA
Canadian auto-parts makers see green opportunity in India - ReportonBusiness
Canadian auto sales jump 15 per cent in January - TheStar
Canadian pension plan eyes Australia investments - MarketWatch
INTERNATIONAL
Chrysler profit means $1,500 bonus for employees - Det.News
Washington Stands Behind Claims of 54.5 MPG Fuel Rules - Wards
Mitsubishi Motors swings back to profit - MarketWatch
Indiana's electric-vehicle bust - Det.News
Wednesday - Feb. 01, 2012
FOCUS: Chrysler's U.S. January sales top 101,000 - MarketWatch
ECONOMIC FUNDAMENTALS: German jobs miracle as Latin unemployment soars - Telegraph
ECONOMIC FUNDAMENTALS II: Hedge funds brace for euro zone break-up - Reuters
CANADA
Canada-EU trade deal a hopeful sign - FinancialPost
Is Old Age Security truly unsustainable? - CBC
INTERNATIONAL
Electric Cars: Doubling Down On Dumb - RealclearMarkets
Chrysler ends robust '11 with $183M profit - Det.News
Double-Digit Production Gains Forecast for North America in 2012 - Wards
Toyota reports robust orders for Aqua hybrid - MarketWatchTuesday - Jan. 31, 2012
FOCUS: Japanese suppliers, execs to pay $548M in price fixing - Det.News
ECONOMIC FUNDAMENTALS: Euro-zone Dec. jobless rate at record 10.4% - MarketWatch
ECONOMIC FUNDAMENTALS II: Europe signs up to German-led fiscal pact - Reuters
CANADA
Did Quebec's fall jobs rout really happen? - FinancialPost
Warning: Debt binge a danger to financial health - ReportonBusiness
INTERNATIONAL
Hyundai Mobis reports new GM, Chrysler contracts - MarketWatch
Treasury ups auto bailout loss estimate - Det.News
Small XV Crosstrek Expands Subaru Lineup - Wards
UK: Ford's 1.0-litre Focus goes on sale - Telegraph
Honda's quarterly profit falls 41% on strong yen - MarketWatch
Monday - Jan. 30, 2012
FOCUS: EU car makers slam India free-trade pact - MarketWatch
ECONOMIC FUNDAMENTALS: EU leaders struggle to reconcile austerity, growth - Reuters
CANADA
Austerity budget is coming, but is this the right time? - ReportonBusiness
Canada downgraded, relations with the U.S. at lowest point in 25 years - FinancialPost
INTERNATIONAL
In Beetle's creation story, a plot twist - Det.News
Hyundai Reticent to Tout Hybrids; Stop/Start Uncertain - Wards
Honda out to shake up market with first jet next year - Reuters
Car-buying tips men can learn from women - MarketWatch
Britain's auto industry rising from the grave - TheStar
Despite strong '11, Ford cautious - Det.News
Friday - Jan. 27, 2012
FOCUS: Ford Motor Co. earns $20.2 billion in 2011 - Det.News
ECONOMIC FUNDAMENTALS: Investors fear mounting losses in Portugal as second rescue looms - Telegraph
CANADA
Does Harper really need to raise the retirement age? - ReportonBusiness
Borrowing Boomers pile on more debt - MoneyVille
INTERNATIONAL
Ford net jumps; operating profit lags estimate - MarketWatch
Jobs, Jobs and Cars - NYTimes
GM: Bad publicity hurt Volt - Det.News
New Chevy Window Sticker Details Cradle-to-Grave Environmental Impact - Wards
Kia targets 2012 sales growth to slow to 9.5% - MarketWatch
Thursday - Jan. 26, 2012
FOCUS: Hyundai Motor posts 38% rise in Q4 net profit - MarketWatch
ECONOMIC FUNDAMENTALS: THE SEEDS OF DYSTOPIA: Roubini & Co. Scare The Crap Out Of Davos - BusinessInsider
ECONOMIC FUNDAMENTALS II: Bernanke has "finger on trigger" for new bond buys - Reuters
CANADA
Canadian jobs quality worsened in 2011: CIBC report - TheStar
Canada imports oil while battling over pipeline exports - CBC
INTERNATIONAL
Ford: Fusion isn't chasing Camry - Det.News
Nissan, Partners Explore Afterlife of EV Batteries - Wards
MG makes a return to racing - Telegraph
Crude oil edges above $100 a barrel - MarketWatch
Fiat-Chrysler in talks to produce Jeeps in China - Det.News
Wednesday - Jan. 25, 2012
FOCUS: Car makers work to sort out mess in Europe - Det.News
ECONOMIC FUNDAMENTALS: Forget Greece; it's Portugal that'll destroy euro - MarketWatch
CANADA
Two major Canadian unions, CAW and CEP, exploring merger by mid-2013 - TheStar
More Canadians in low-paying jobs - ReportonBusiness
INTERNATIONAL
Audit rips exec pay in bailouts - Det.News
GM International Chief Sees Remedy for European Ops as Sales Soar Elsewhere - Wards
Opel Talking with SAIC Regarding China Sales Expansion - ChinaCarTimes
GM CEO to Congress: Volt is safe - Det.News
Tuesday - Jan. 24, 2012
FOCUS: European Debt Won't ‘Put Brakes on the World,' Ford Executive Says - Wards
ECONOMIC FUNDAMENTALS: Worries Portugal may need second bailout: WSJ - MarketWatch
ECONOMIC FUNDAMENTALS II: Euro zone may skirt recession as PMIs surprise - Reuters
CANADA
Signs augur well for Canadian entry in TPP: Trade Minister - ReportonBusiness
Carney warns U.S. may never fully recover - CBC
INTERNATIONAL
Auto bankruptcies weighed early - Det.News
The art of the supercar - Telegraph
Volkswagen Aims to Combine With Porsche as Soon as Economically ‘Sensible' - Bloomberg
Congress yet to OK electric auto agenda - Det.News
Monday - Jan. 23, 2012
FOCUS: OPEC: $100 oil acceptable to producers, consumers - MarketWatch
ECONOMIC FUNDAMENTALS: Davos guide: what you need to know about the World Economic Forum - Guardian
CANADA
Stalled on the road to economic recovery - ReportonBusiness
INTERNATIONAL
Hyundai rattles Volkswagen in Europe after winning in U.S. - Det.News
Momentum Builds for Chrysler Design Team - Wards
Toyota to cut 350 jobs at Australian plant - MarketWatch
GM Faces Task of Rebuilding Volt Image After NHTSA Ends Its Investigation - Bloomberg
Friday - Jan. 20, 2012
FOCUS: GM again world's largest on strong Chevy sales - Det.News
ECONOMIC FUNDAMENTALS: Shilling says new global recession is here - MarketWatch
ECONOMIC FUNDAMENTALS II: Factbox: What happens if Greece defaults? - Reuters
CANADA
Annual inflation falls sharply to 2.3% - ReportonBusiness
Who knew? Toronto's economy is on fire - FinancialPost
INTERNATIONAL
GM picks N.Y. man's ad to air during Super Bowl - Det.News
Mazda3 Hints at Things to Come - Wards
UK: Ten most expensive cars to insure - Telegraph
Chrysler, GM wait on raises, bonuses - Det.News
Thursday - Jan. 19, 2012
FOCUS: Science panel backs closing of Toyota acceleration probe - DetroitNews
ECONOMIC FUNDAMENTALS: IMF sees euro zone GDP down 0.5 percent in 2012: ANSA - Reuters
CANADA
Don't settle for new 'natural' jobless rate of 7 per cent - ReportonBusiness
BOC's Mark Carney puts a price tag on global turmoil - TheStar
Living the American dream -- in Canada - MarketWatch
INTERNATIONAL
Akerson to testify in Volt probe - DetroitNews
Saab: a celebration - Telegraph
Honda's Plan To Manufacture Supercars In America Is A Gamechanger - BusinessInsider
Renault has no plans to sell Volvo stake: report - MarketWatch
Kia Stop/Start Stalls - Wards
Wednesday - Jan. 18, 2012
FOCUS: Average age of cars, trucks hits 10.8 years, sets record - DetroitNews
ECONOMIC FUNDAMENTALS: IMF explores $1 trillion lending boost - MarketWatch
ECONOMIC FUNDAMENTALS II: Hungary faces ruin as EU loses patience - Telegraph
CANADA
Federal budget may be delayed by European woes - CBC
Flaherty watching risky debt as Carney leaves BOC interest rate at 1 per cent - TheStar
INTERNATIONAL
Toyota sets high Korean target for Camry sales - MarketWatch
Lotus's Incoming Malaysian Owner Says It's Open to Selling Sports Carmaker - Bloomberg
Mercedes to Ponder Engine Exports From U.S. - Wards
Toyota to build 30,000 hybrid subcompacts in Feb - MarketWatch
Tuesday - Jan. 17, 2012
FOCUS: Saudis target 'triple-digit' oil price for the first time - ReportonBusiness
ECONOMIC FUNDAMENTALS: Eurozone's 'big bazooka' bail-out fund is left in tatters by S&P downgrade - Telegraph
CANADA
Canada: A global energy superpower - FinancialPost
Euro woes temper growth: Mark Carney - ReportonBusiness
INTERNATIONAL
Fiat, Peugeot Lead European Car-Sales Drop as Economy Slows - Bloomberg
Public hearing in Detroit to address fuel economy standards - DetroitNews
Mini and Chrysler Recall Vehicles for Electronic Flaws - WSJ
Denso Growth Heats Up - Wards
Monday - Jan. 16, 2012
FOCUS: Today's youth a tough sell for automakers - DetroitNews
ECONOMIC FUNDAMENTALS: IMF: European outlook grim; high global risks - MarketWatch
ECONOMIC FUNDAMENTALS II: UK back in recession and no interest rates rise 'until 2016' - Telegraph
CANADA
Carney set to keep powder dry, stand pat on rates - ReportonBusiness
INTERNATIONAL
Saab Owners Still Rallying To Support Brand - WSJ
Billionaire Syed Mokhtar's DRB-Hicom to Buy Control of Lotus-Owner Proton - Bloomberg
Opel to Unveil New Mokka Small CUV in Geneva - Wards
GM Vice Chair Stephens to retire on April 1 - DetroitNews
FASTWEBILINK ARCHIVE
