March 30, 2016 - BOE Report
Large rail shipments of crude from the Midwest to coastal areas have decreased significantly over the past two years, especially to the Gulf Coast and East Coast. This decrease in rail transportation has paralleled the dramatic increase of pipeline infrastructure between PADD 1 and PADD 3. Crude by rail has also been affected by the demise of oil prices and narrowing discount on domestic rail transportation. All three factors have made crude by rail less favorable compared to different modes of infrastructure as they prove to be more economic.
All areas of the country have seen a decline in domestic railroad transportation from the Midwest in the past three years. Transportation to PADD 1 on the east coast has seen a drop of 200 thousand barrels per day over the last year alone. Shipments from the Midwest to the Gulf Coast have steadily declined from 250,000 barrels per day to below 50,000 barrels per day over the past three years. Rail deliveries have remained relatively steady however, delivering crude to the Pacific in PADD 5 at a rate of 150,000 barrels per day. Overall, rail transports have taken a sizeable hit but remain ready to continue delivering crude to PADD 1 and PADD 5.
The major influencing force behind this change in transportation has been the decline in oil prices, and more specifically, the narrowing of the price margin between WTI and Brent crude.
Read more: http://boereport.com/2016/03/30/midwest-railroad-crude-transportation/
Large rail shipments of crude from the Midwest to coastal areas have decreased significantly over the past two years, especially to the Gulf Coast and East Coast. This decrease in rail transportation has paralleled the dramatic increase of pipeline infrastructure between PADD 1 and PADD 3. Crude by rail has also been affected by the demise of oil prices and narrowing discount on domestic rail transportation. All three factors have made crude by rail less favorable compared to different modes of infrastructure as they prove to be more economic.
All areas of the country have seen a decline in domestic railroad transportation from the Midwest in the past three years. Transportation to PADD 1 on the east coast has seen a drop of 200 thousand barrels per day over the last year alone. Shipments from the Midwest to the Gulf Coast have steadily declined from 250,000 barrels per day to below 50,000 barrels per day over the past three years. Rail deliveries have remained relatively steady however, delivering crude to the Pacific in PADD 5 at a rate of 150,000 barrels per day. Overall, rail transports have taken a sizeable hit but remain ready to continue delivering crude to PADD 1 and PADD 5.
The major influencing force behind this change in transportation has been the decline in oil prices, and more specifically, the narrowing of the price margin between WTI and Brent crude.
Read more: http://boereport.com/2016/03/30/midwest-railroad-crude-transportation/