March 23, 2015 – RailwayAge
RBN Energy: CBR to Northwest refineries resilient
By: William C. Vantuono
Northwest crude oil refiners are still shipping significant volumes of crude from North Dakota’s Bakken region, RBN analyst Sandy Fielden discusses in “Slow Train Coming: Crude By Rail To Northwest Refineries Still Resilient.”
Following are highlights from Fielden’s report, which can be accessed by clicking HERE:
• Most of the crude by rail (CBR) shipments to refineries in Washington State are ex-North Dakota from where rail freight costs are more than $10/Bbl. Bakken crude from North Dakota competes at Washington refineries with Alaska North Slope (ANS) shipped down from Valdez. Back in 2012, ANS prices were more than $20/Bbl higher than Bakken crude, easily covering the rail cost. In 2016, so far the ANS premium to Bakken has averaged well below the $10/Bbl freight cost, making CBR shipments uneconomic. But, Northwest refiners are still shipping significant volumes of crude from North Dakota.
• The West Coast market is somewhat different than the rest of the U.S., and CBR economics are closely tied to the difference between inland domestic crude prices linked to WTI and West Coast prices for ANS crude delivered to Long Beach, Calif. ANS is the default crude processed by most West Coast refineries and before shale crude largely competed with imported crudes was priced against international benchmark Brent. When Bakken crude from North Dakota is selling at a significant discount to ANS and Brent (as it was in 2012), the additional cost of rail freight to West Coast refineries is more than justified.
Read the full article here: http://www.railwayage.com/index.php/management/rbn-energy-cbr-to-northwe...
