Canadina Crude

Crude by rail (CBR) shipments from North Dakota to West Coast destinations peaked in January 2015 at 170 Mb/d – falling since then to average 140 Mb/d in 2015, January through May. The vast majority of these shipments have moved to four refineries in Washington State – providing a cheaper alternative to the Alaska North Slope (ANS) crude staple these refineries have run for decades. There is big potential to expand CBR shipments to West Coast Ports and to California but building the infrastructure has proven painstakingly slow. Today we discuss the long term fate of West Coast CBR.

WTI for prompt delivery closed $10.94/Bbl below Brent on Wednesday (October 23, 2013). Brent prices are disconnected from WTI and Light Louisiana Sweet because the Gulf Coast is awash with light sweet crude. West Coast crude prices on the other hand are supposed to march to a different tune – isolated from new shale and Canadian crude supplies and thus expected to continue tracking international Brent. But ANS prices on the West Coast have fallen to more than $5/Bbl below Brent in the past 2 weeks and seem to be tracking WTI. Is this just a temporary aberration or could it be signaling another step change in the road to US crude independence? Today we take a closer look at what’s going on.