Canadian crude by rail traffic increased slightly in March after taking a 200,000-bbl/d dive in February, according to the latest data from the National Energy Board.
Volumes dropped from 353, 789 bbls/d in December and 325,499 bbls/d in January to just 130,564 bbls/d in February, but got a bump up in March to 168,483 bbls/d, the NEB said.
Much of Canada’s crude by rail traffic is sent to the U.S. Gulf Coast, the world’s largest heavy oil refining market.
The dramatic decrease occurred following the Alberta government’s oil curtailment order, which reduced the discount that Canadian heavy crude receives compared to U.S. light oil to under $10/bbl, erasing the incentive for the extra price of rail transport.
The differential averaged US$10.18/bbl in March, according to the Daily Oil Bulletin.
While all that has been occurring in Alberta, U.S. sanctions on Venezuela have reduced offshore heavy oil imports to the U.S. Gulf Coast.
March crude by rail imports increased despite a continuing narrow price differential, the NEB noted on Twitter on Wednesday.
“Increased demand from #US Gulf Coast refineries due to decreasing heavy #crudeoil supplies in global markets is one factor behind the rise,” the regulator said.
The differential averaged US$10.06/bbl in April but so far in May has widened to US$13.62 as Alberta has eased its oil curtailment order.
The cut started at 325,000 bbls/d in January but has been reduced each subsequent month and is currently at 175,000 bbls/d for June.