November crude-by-rail exports set new record despite slower growth pace

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November crude-by-rail exports set new record despite slower growth pace

CALGARY — The National Energy Board says crude-by-rail exports from Canada grew at a slower pace in November, but still reached a new record high.

Canada exported more than 330,000 barrels per day of oil, up about one per cent from October’s total of 327,000 bpd, and more than double the 148,000 bpd moved in November 2017.

The slower November growth came after double-digit month-over-month growth in August, September and October.

Full export pipelines were blamed for a glut of oil in Western Canada last fall that led to large discounts for bitumen-blend Western Canadian Select crude compared with New York benchmark West Texas Intermediate.

Those differentials have narrowed since the government of Alberta announced last month it would impose crude oil production curtailments of 325,000 bpd starting Jan. 1.

The province has also promised to buy as many as 80 locomotives and 7,000 rail tankers to help move oil to markets starting in late 2019.

Oilsands giant Suncor Energy Inc. has warned that the tighter differentials have made crude-by-rail shipping “uneconomic.”

Analysts estimate it costs about US$20 per barrel to ship Canadian oil by rail to markets on the U.S. Gulf Coast, so discounts that are lower than that make the option less attractive.

Companies in this story: (TSX:SU)

Published at Thu, 24 Jan 2019 19:44:13 +0000

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