Crude-by-rail exports fall 15% in October as price differential tightens

Print 🖨

CALGARY — The Canada Energy Regulator says exports of crude oil by rail fell by 15 per cent in October to 270,000 barrels per day from 319,600 bpd in September.

The October number is the lowest in six months and well below the record high of 354,000 bpd set in December of 2018.

The regulator blames the decrease on narrower price difference between prices Western Canadian Select bitumen-blend oil in Alberta and U.S. benchmark West Texas Intermediate in New York.

It costs more to ship oil by rail than by pipeline, so wider differentials are required for the practice to be profitable.

The Alberta government has said it expects crude-by-rail shipments to rise after it announced a program at the end of October to allow producers who add rail-shipping capacity to increase their production.

The amount of oil large companies are allowed to produce in December was set at 3.81 million bpd — up from 3.56 million bpd when a provincial curtailment program started last January.

This report by The Canadian Press was first published Dec. 20, 2019.

The Canadian Press