Crude-by-rail exports fall in January as Alberta started production cuts

CALGARY – The National Energy Board says crude-by-rail exports in January fell compared with December, but remained more than twice as high as 12 months earlier.

The federal agency reports an average of 325,500 barrels per day of oil was exported by rail in January, down from 353,800 bpd in December but well above 145,700 bpd in January 2018.

It says total crude oil exports by rail, pipeline and trucking fell to 3.49 million bpd in January from 3.92 million in December, but were higher than the 3.38 million bpd in January 2018.

Alberta enacted a crude production curtailment program as of Jan. 1 designed to keep 325,000 bpd off the market to clear up a glut of oil that had overwhelmed pipeline capacity and lowered prices. The curtailment level is to fall to about 175,000 bpd by June.

About half of Canada’s crude-by-rail shipments in December were made by Calgary-based Imperial Oil Ltd.

The company cut its rail shipments in January and vowed to take them to near zero in February because of market reaction to the curtailment program.

Imperial says the curtailments resulted in narrower differences between prices for crude sold in Alberta and in the U.S. and thus impaired the economic case for paying rail fees to win better prices on the U.S. Gulf Coast.

Companies in this story: (TSX:IMO)