Reuters discusses Shell’s decision not to build a rail terminal in Washington state which would deliver up to 400,000 bpd of Bakken crude here: http://www.reuters.com/article/us-oil-rail-shell-idUSKCN1280HH
Here are some highlights:
“Shell said the conditions of the global crude market and a tight capital environment made its project uneconomic.”
“Inland North American producers have seen four projects stymied since September, owing to both environmental opposition and an oversupplied global oil market that make it easier and cheaper to import cargoes than transport inland crude thousands of miles on railcars.”
“Current pipeline and refining capacity out of the Bakken is around 851,000 bpd, and about 60 percent of its output leaves the region on pipeline, according to the state’s pipeline authority.
Nearly all of the rest goes by rail, which has loading capacity around 1.52 million bpd.”
“Higher oil prices could unleash a wave of supply from the Bakken, which as of June had more than 700 drilled-but-uncompleted wells, more than any other major shale region in the United States, according to data from Wood Mackenzie.”
Here is the bottom line:
“Bakken discounts to WTI have narrowed sharply since 2013, and in early October were at about $1.”
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