From: Edmonton Journal
By Yadullah Hussain, Financial Post
By Yadullah Hussain, Financial Post
Canadian
crude oil exports by rail — not counting domestic hauls to refineries —
grew to just over 182,00 barrels per day by the third quarter, compared
to around 165,000-bpd at the start of 2014, the latest available
figures from the National Energy Board show.
Rail was seen as a lifeline for Canadian oil producers in the absence
of new pipelines, but narrowing spreads between Canadian oil and global
benchmarks in recent months is turning the business model uneconomic in
an already depressed price environment.
“Right now, there are
very few movements of crude by rail coming from Western Canada into the
Gulf Coast, because it just does not make sense economically,” said
Bridget Hunsucker, analyst at Genscape, which tracks weekly oil carloads
across North America.
Before oil prices sank, Canadian producers
shipped oil on rail to fetch much higher West Texas Intermediate oil
prices on the U.S. Gulf Coast than they could at the Hardisty terminal
in Alberta. The business made sense even after taking into account
transportation costs as high as $21 per barrel of oil on rail, compared
to $7 via pipeline. MORE
No comments:
Post a Comment