• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 44 mins Science: Only correct if it fits the popular narrative
  • 48 mins Crazy Stories From Round The World
  • 9 hours What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 7 hours China's Renewables Boom Hits the Wall
  • 14 hours EU has already lost the Trump vs. EU Trade War
  • 1 day Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 1 day ''Err ... but Trump ...?'' *sniff
  • 8 hours Do The World's Energy Policies Make Sense?
  • 8 hours Forget out-of-date 'dirty oil' smear, Alberta moving to be world's cleanest oil industry
  • 40 mins Impeachment Nonsense
  • 1 day Tesla Launches Faster Third Generation Supercharger
  • 13 hours Water, Trump, and Israel’s National Security
  • 2 days Passerby doused with flammable liquid and set on fire by peaceful protesters

Breaking News:

Russia Plans To Boost Crude Oil Exports

Alt Text

Canadian Oil Prices Crash After Keystone Spill

Canadian crude continues to trade…

Alt Text

A Bear’s Guide To Oil Markets

2019 hasn’t been the year…

Alt Text

Economic Uncertainty Leaves Oil Markets Paralyzed

The Federal Reserve cut interest…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Canadian Oil Prices Reach 12-Month High

Canadian crude oil hit the highest price level in more than a year on growth in oil-by-rail shipments, Bloomberg reports based on data about price movements for the commodity it had compiled.

As a result of the increase in oil-by-rail shipments, Canada’s benchmark Western Canadian Select yesterday traded at a discount of only US$10.50 to West Texas Intermediate. This compares to more than US$50 a barrel in mid-2018.

It’s worth noting the shrinking discount of WCS to WTI does not fit in with the growing amount of Canadian heavy being moved to refineries in the United States by rail. As Bloomberg’s Robert Tuttle explains, the current discount is too narrow to cover the costs of oil-by-rail shipments to U.S. refiners. In fact, it’s too narrow to cover the costs of shipping some of the oil by pipeline, too.

Yet rail shipments are set to continue growing as pipelines are working at capacity and no new ones are coming. But some familiar with the industry argue that moving Canadian heavy crude by rail is not as expensive as it may seem: unlike the crude that flows via pipelines, bitumen doesn’t have to be diluted—which also costs money—to be loaded on train cars. This line of argument could explain the rise in oil-by-rail shipments as could the fact there are simply no other options for Canadian producers.

According to data from Genscape cited by Bloomberg, Canadian oil producers exported some 281,000 barrels of crude daily by rail in the last week of December, which compared to an average of 263,000 bpd for November. Producers, Genscape analyst Mike Walls told Bloomberg, also closed several long-term oil-by-rail delivery contracts late last year, which means these shipments will continue strong even after production cuts enforced by the Alberta government at the end of last year begin to make a dent in supply.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play