Update on Shipping Bakken Oil By Rail

Link here.

Trains have quickly become a huge part in hauling crude from North Dakota's oil patch with producers shipping barrels to more profitable markets not served by pipelines.

Motivated by the possibility of making more than $20 a barrel, North Dakota producers increasingly are sending crude on rail, including to a Louisiana terminal some 1,800 miles away.

"The new paradigm is rail," said Harold Hamm, chief executive of Enid, Okla.-based Continental Resources Inc., one of the oldest and biggest players in the rich Bakken shale and Three Forks formations in western North Dakota.

North Dakota crude typically sells for $10 less per barrel at Cushing, Okla., where benchmark prices are set for West Texas Intermediate crude on the New York Mercantile Exchange.

Some North Dakota producers are now bypassing Cushing, in search of better prices in Louisiana, where the gap between prices for Light Louisiana Sweet and West Texas Intermediate crude has risen to historic levels. North Dakota sweet crude compares in quality to Light Louisiana Sweet and fetches like prices.

For previous posts on shipping Bakken oil by rail, click on the tag "Rail" at the very bottom of the blog.