The UK government and Tata…
U.S. airlines brace for reduced…
Canadian crude-by-rail exports jumped to a record in June 2018, exceeding 200,000 bpd for the first time and nearly doubling compared to June last year, Canada’s National Energy Board (NEB) said in its latest crude oil exports data, in a sign that Canadian producers are increasingly using the railroad option to move their crude to market as pipeline capacity out of Canada is full.
Canadian crude-by-rail exports jumped to 204,558 bpd in June this year, the latest available NEB data showed. That’s up from the previous record—set in the previous month May—of 198,788 bpd exports of crude-by-rail. In June last year, Canada had exported 109,506 bpd of crude oil via railcars.
Canada’s heavy oil from the oil sands continues to grow, thanks to projects approved and commissioned before the oil price crash, and its economic recovery is driven by the oil industry. But drillers are finding it increasingly difficult to get this oil to the market because pipelines are running at capacity, while pipelines planned are facing opposition from various groups.
Due to the transportation bottlenecks, the discount at which Western Canadian Select (WCS)—the benchmark price of oil from Canada’s oil sands delivered at Hardisty, Alberta—trades relative to WTI has been more than US$20, and at times US$30 a barrel this year.
Earlier this month, Canada Natural Resources, the largest producer, said that it was allocating capital to lighter oil drilling and curtailing heavy oil production as the price of Canadian heavy oil tumbled to a nearly five-year-low relative to the U.S. benchmark price.
A couple of weeks before that, Canadian National Railway (CN) chief executive officer Jean-Jacques Ruest said that the company expects to move more crude oil by rail in the second half of this year as it will have more capacity on its trains.
“In the second half we will have more capacity, therefore we will also be able to execute a bigger book of business of crude,” Ruest told analysts at the end of July.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.