CALGARY, A.B. – Genscape says crude-by-rail shipments from Western Canada staged a minor recovery in March after falling in February to their lowest level in nine months, but oil storage levels remain stubbornly high.
The U.S. company, which monitors western Canadian rail terminals handling about 80 per cent of typical volumes, reports average rail loadings in March were 150,000 barrels per day.
That’s up about 6,000 bpd from an average of 144,000 bpd in February, but still down from the 281,000 bpd it recorded in January.
Genscape senior oil analyst Mike Walls says the recovery came as Imperial Oil Ltd. restarted rail shipments from its Edmonton-area terminal after largely shutting them down in February, blaming market reaction to Alberta’s oil production curtailment program.
Walls says Genscape estimates the amount of oil in storage as of March 29 was 35 million barrels, about the same as in early December when the Alberta government announced its curtailment program designed to free up export pipeline space and reduce stored barrels.
The March number is about two million barrels lower than peak levels just before the cutbacks officially began in January, he said, and higher than the 33.4 million barrels stored at the end of March 2017.
Imperial said it stopped rail shipments because the curtailment program resulted in narrower differences between prices for crude sold in Alberta and in the U.S., and thus impaired the economic case for paying rail fees to win better prices on the U.S. Gulf Coast.