Canadian Manufacturing

Crude by rail exports above 200,000 barrels per day for the first time in June

The Canadian Press

Canadian Manufacturing
Exporting & Importing Operations Infrastructure Oil & Gas

Growth in railway oil shipments is due to the wider-than-usual discount being paid for Western Canadian Select crude, say analysts

PHOTO: Ray Bodden/Flickr

CALGARY – The National Energy Board says crude-by-rail exports from Canada set another record in June, rising to 204,558 barrels per day.

That’s up almost three per cent from 198,800 in May and 86 per cent from 109,500 in June 2017.

In a report Wednesday, analysts at AltaCorp Capital linked growth in railway oil shipments to the wider-than-usual discount being paid for Western Canadian Select crude compared with New York-benchmark West Texas Intermediate oil.

The discount increase has been blamed on the difficulty in getting western Canadian oil to market because of tight pipeline capacity as three proposed export pipeline projects face ongoing delays.


AltaCorp says the rate of growth in crude-by-rail volumes since the discount rose above US$25 per barrel last year has actually lagged behind that seen in 2011-12, the last time the differential was as wide.

It attributes the slower growth to reluctance by rail companies to increase capacity and producers to sign long-term transport contracts to deal with market conditions that may only last until new pipelines come on stream, possibly as early as late 2019.



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