Canadian railroads are rapidly hiring new employees to keep up with record demand for transporting crude oil by rail. Deborah Jaremko writes for JWEnergy: The price of Canadian heavy crude is currently trading at a whopping $30-plus per barrel less than U.S. light oil, but the spread should narrow as more crude by rail comes online, analysts said on Thursday. Crude by rail traffic has hit record levels this year and is expected to continue increasing until additional export pipeline capacity is completed out of western Canada. Carloads reached 200,000 bbls/d for the first time earlier … [Read more...]

According to Energy Transfer Partners CEO Kelcy Warren, making money in pipelines right now is so easy a monkey could do it. That follows a strong earnings season for pipelines, a booming U.S. oil industry, and regulatory relief from the Trump administration. In The Wall Street Journal, Ryan Dezember reports on these developments, writing: From a peak in August 2014, the Alerian MLP index lost 63% before bottoming out in February 2016. MLP shares rebounded somewhat alongside rising U.S. oil prices but were dealt a fresh blow in March. On March 15, the Federal Energy Regulatory … [Read more...]

After shortages of sand supplies slowed down Permian Basin oil production two years ago, so many companies have begun efforts to mine sand that the Texas oil patch may soon be overwhelmed with sand supplies. At The Wall Street Journal, Christopher Matthews explains the possible over-investment in the dunes of the West Texas desert. He writes: Now, around 20 sand mines are set to be active in the Permian Basin, America’s most active oil field, by year’s end, and even some of those who put hundreds of millions of dollars behind these startups predict they won’t all survive. Sand is a key … [Read more...]

Rob Taylor reports in The Wall Street Journal that the long dry spell in Australia is putting farmers at risk of going completely out of business. He writes: A severe drought has gripped an area of Australia more than twice the size of Texas, turning normally fertile crop areas into dust bowls, draining water reserves and leaving wine-producing regions parched. Hungry kangaroos are turning up in cities. Millions of dollars of farm equipment is idle across vast expanses of agricultural land in the continent’s east, and farmers are wondering if they should bother planting summer … [Read more...]

Delays in building new pipelines from Canada's oil sands fields have generated record shipments of oil-by-rail in May in Canada. The Edmonton Sun reports: New data from the National Energy Board shows Canadian oil companies shipped an average of 198,788 barrels of oil per day on railway cars in May, the latest month for which data is available, marking a record high and a 42 per cent increase over the 130,916 bpd shipped on rail in the same month a year earlier. Over the same period, Canadian oil production is expected to have risen to 4.5 million bpd, from 3.9 million bpd according to an NEB … [Read more...]

According to Kim Mackrael of The Wall Street Journal, tight trade links make it unlikely that tariffs will change business behavior in metal-intensive industries. She writes: Lakeshore, ONTARIO—Across the border from the U.S. auto capital of Detroit, a Canadian company here buys aluminum made at smelters in Quebec using bauxite from Africa or Brazil that Ford Motor Co. puts in America’s best-selling pickup, the F-150. The tightly woven production chain illustrates the U.S. dependence on aluminum from Canada that many say is unlikely to change despite recent metals tariffs the Trump … [Read more...]

Off the coast of Guyana, Exxon Mobil Corp. has found what appears to be a multi-billion barrel oil patch. The find could be a just what Exxon needs, and could put Guyana among the major oil producing countries in the world by generating even more production than OPEC members Equatorial Guinea and Gabon. Bloomberg's Kevin Crowley reports: Exxon Mobil Corp. increased its estimate for a giant offshore oil discovery in Guyana by 25 percent yesterday, but it may just be the beginning. Some 8 of 10 exploration wells have struck oil since 2015 and Exxon has identified a further 19 targets to … [Read more...]

There is a growing body of evidence to support the theory that China's economy is slowing down. One of the clearest signs is the recent drop in metals prices. If the Chinese economy spirals down, it could tank the market for metals and other commodities along with it. Neil Hume reports for the FT: Mining stocks were under pressure on Thursday as selling of industrial metals intensified on concerns about demand from China, the world’s biggest consumer of raw materials. Copper fell 2.5 per cent and slipped below $6,000 a tonne for the first time in a year, while zinc was off 3.9 per cent at … [Read more...]

According to the International Energy Agency, spare oil production capacity will be stretched to the limit as a result of sanctions on Iran and other supply disruptions in places like Venezuela and Libya. David Sheppard reports at the FT: The Paris-based agency said that while there were signs stronger oil prices may start to weigh on demand growth, for the moment the key risk was supply capacity, with moves by producers to raise output cutting into the thin buffer of reserve production. “Rising production from Middle East Gulf countries and Russia, welcome though it is, comes at the … [Read more...]

Costas Paris and Joanne Chiu report in The Wall Street Journal that coming sanctions on Iran are already having an effect on how shipping companies are approaching the oil exporting country. They write: It will be months before new U.S. sanctions against Iran take hold, but global shipping operators are already pulling back from the big oil-exporting nation. The world’s two biggest shipping lines, Denmark’s Maersk Line and Swiss-based Mediterranean Shipping Co., said they were winding down general cargo shipments, while tanker owners said they plan to move their vessels to other … [Read more...]