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Canada crude-by-rail volumes shrink 39 pct in Dec. 2015

Published 2016-02-25, 05:00 p/m
© Reuters. Canada crude-by-rail volumes shrink 39 pct in Dec. 2015
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CALGARY, Alberta, Feb 25 (Reuters) - Canadian exports of
crude oil by rail dropped 39 percent in December versus the same
month a year earlier, National Energy Board data showed on
Thursday, in part due to poor revenues for oil producers and
narrow discounts on Canadian heavy crude.
Canada shipped 106,704 barrels per day of crude by rail to
the United States in the final month of 2015, significantly
lower than the 175,654 bpd transported in tank cars in Dec.
2014, which was close to the height of the crude-by-rail boom.
Oil-by-rail exports grew rapidly between 2012 and 2014
thanks to booming oil sands production, tight pipeline capacity
and discounts of up to $40 on heavy crude sold in Alberta, which
made it economic to ship Canadian barrels to higher-priced
markets south of the border.
But with the more than 70 percent slide in global crude
prices since June 2014 and the discount on Canadian heavy oil
narrowing to around $15 a barrel, producers are again opting for
the cheaper option of shipping crude by pipelines.
Even so, volumes have picked up from the low point of 80,000
bpd hit in June last year, averaging 125,000 bpd in the fourth
quarter of 2015, according to the NEB.
The Canadian regulator also said that while the current
estimated rail loading capacity of 1.1 million bpd is "well
above current and projected short-term needs", if no major
export pipelines are built and new oil sands production comes
online as scheduled, Canada's crude-by-rail shipments may shoot
up dramatically.
The country could need to ship 500,000 bpd by rail in
2017-18 and 1.2 million bpd by 2040, the NEB said.

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