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Crude-by-rail shipments bounce back from summer lows in September, says CER

Rail transportation of crude oil is considered to be more expensive than shipping by pipeline so shippers tend to use it only when pipelines are full.
2201 countybriefs train on trestle dr 25
File Photo. DAN RIEDLHUBER/St. Albert Gazette

CALGARY — Canadian exports of crude oil by rail are bouncing back after falling to an eight-year low in July.

The Canada Energy Regulator says rail shipments of oil in September amounted to 94,440 barrels per day, nearly double the 51,000 bpd shipped in August.

Only 39,000 bpd was shipped in July. That's less than a tenth of the record 412,000 bpd moved by rail in February.

Rail transportation of crude oil is considered to be more expensive than shipping by pipeline so shippers tend to use it only when pipelines are full or if the destination market offers much higher prices than can be achieved in Canada.

The CER says the lower use of rail compared with February results from lower crude oil production in Western Canada as global oil demand slumps due to the COVID-19 pandemic.

The reduced production levels have freed up more space on export pipelines.

 

This report by The Canadian Press was first published Nov. 25, 2020.

The Canadian Press

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