Rail Crude Oil Shipments Down 45%

Crude oil shipments by rail fell 45 percent in the first five months of 2016 when compared with the same period in 2015.

The U.S. Department of Energy said crude oil shipments averaged 443,000 barrels per day this year.

train image2About half of the decline was due to fewer shipments of crude oil from the Midwest to the East Coast.

The DOE said crude oil shipments by rail have been in decline since summer 2015 due to a narrowing of price differences between domestic and imported crude oil, the opening of new crude oil pipelines, and declining production in the Midwest and Gulf Coast on-shore regions.

In a report, the department said the economics of crude-by-rail transportation depend on the relationship between the prices of domestic and international crude oils.

Domestic crude oil priced in the Midwest and western Texas are no longer heavily discounted relative to imported crude oils priced in the North Sea.

DOE said the narrower the spread between domestic and imported crude oils, the more likely that coastal refiners will choose imported crude oil rather than domestic supplies shipped by rail.

Although it suffered the largest fall, the market for Midwest crude oil to the East Coast remains the largest in the U.S., accounting for 176,000 barrels per day or 45 percent of the total crude oil moved by rail within the United States in May 2016.

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One Response to “Rail Crude Oil Shipments Down 45%”

  1. tylerjs40 Says:

    Sad to see that 45 percent of the oil is not shipped by rail anymore.

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