Rail shipments of crude booming on big price spreads
BY JOSHUA SCHNEYER, REUTERS AUGUST 23, 2011 3:54 PM
Railroads could allow growing oil supply from Canada’s oilsands, above, and North Dakota to bypass the U.S. Midwest, as pipeline projects face permitting delays and opposition from environmental groups.
Photograph by: Bruce Edwards, Bruce Edwards
NEW YORK — U.S. crude oil shipments by railroad could help to end gaping price distortions in world oil markets faster than most traders have been expecting.
Rail shipments of crude from the landlocked and oversupplied Midwest to refiners in the Gulf Coast appear set to surge next year, to nearly double the volume now flowing in congested pipelines between the regions.
The shipments, which were rare until this year, have already grown to around 100,000 barrels per day (bpd) in recent months, industry sources told Reuters. Two rail terminals in St. James, Louisiana are receiving much of the crude, while other sites like Houston are taking additional crude.
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