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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 this year, and GMP FirstEnergy expects this may rise to 400,000 bbls/d this winter.
The surge in demand has been challenging for Canada’s rail companies, analysts said.
“The very wide differentials we are seeing in recent weeks are reflective of what in our view is a temporary situation where the need for crude by rail is exceeding the logistical capabilities of the rail companies (CN and CP) to move those volumes. Both CN and CP have been on a hiring spree.
Read more here.