Monday, November 21, 2011

Crude-By-Rail -- Rail Central -- The Bakken, North Dakota, USA

Spot oil prices:

January 6, 2012: CP Rail (Canada) staying busy due to the Bakken

Crude-by-rail oil loading terminals, February, 28, 2011: a PDF.

Mike Filloon on implications of increased crude-by-rail:
Other reasons to be bullish the Bakken names has to do with additional railcars. This is important as Continental Resources has been using the railroad to sell its crude in Louisiana. Louisiana Light is selling at a much higher price than WTI and should continue to do so. Hess' railcars will be able to initially ship 54000 bopd, but says it will increase to 150000 Bo/d depending on demand. 
Incredibly prescient: November 13, 2011, Mike Filloon:
The premium seen for Louisiana Light Sweet more than covers the increased cost of transport. A very interesting point made by Mr. Hamm is his take on Cushing and the tightening of the differentials of WTI vs. Brent. He believes this has already begun. I think the recent tightening has more to do with the price of world oil (Brent) decreasing because of the fear of financial collapse in Europe. Mr. Hamm also sees in 3 to 6 months a relief caused by the Seaway Pipeline.

Conoco has said they would be selling and there are interested parties. Longer term, Mr. Hamm states the first segment of the Keystone XL from Cushing to Houston will provide a much larger, long term relief. [In hindsight, that was an incredible nugget reported by Mike. The Conoco sale/Enbridge buy/Seaway reversal was reported November 16, 2011, three days later.]

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