Price differentials boost rail transport of blended bitumen

02/18/2013
A surge in rail delivery of crude oil and oil products in the US last year reflects, in part, a textbook system of price leapfrog, known more formally as location arbitrage. Although oil is far more expensive to move by railcar than by pipeline, tracks connect more places than pipes do. So when production surges somewhere not fully served by pipelines, such as the Bakken play in North Dakota, oil finds its way into tank cars. The Energy Information Administration reports Association of American Railroads data showing last year's rail delivery of crude and oil products exceeded the prior year's total by 46%. Crude shipments dominated the increase, most of which reflected developments insid...
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