The National Energy Board says crude-by-rail exports from Canada grew to a record 193,500 barrels per day in April, up 13 per cent from the previous month, as full pipelines forced more producers to use trains to get their products to market.
The oil shipping tally beat the previous record of nearly 179,000 bpd in September 2014 and was well ahead of the 150,000 bpd moved in April 2017.
Andrew Botterill, a partner with accounting firm Deloitte, says he expects rail shipments will continue to grow this year.
He says the increased use of rail will allow prices for Western Canadian Select bitumen-blend crude oil to strengthen as compared with New York benchmark West Texas Intermediate crude.
Botterill says demand for Canadian heavy oil is expected to increase as it will be needed in the U.S. Gulf Coast refining complex to replace shrinking volumes from Venezuela.
Deloitte forecasts global oil prices will fall back from recent three-year highs in the coming months as OPEC countries increase output and international demand for oil declines.
“Continuous decreases in Venezuelan production volumes, the possibility of sanctions enforced by the United States on Iran, and decreased oil stockpile volumes have escalated global oil prices,” the report says.
“However, these are expected to recede in coming months as OPEC members increase rates to fill void agreement volumes resulting from Iranian and Venezuelan production cuts.”