US crude oil movement by rail
The EIA (U.S. Energy Information Administration) reported that US crude oil movement by rail fell by 4,577,000 barrels to 12,134,000 barrels in June 2016—compared to the previous month. It’s the lowest US crude oil movement by rail level since June 2012. US crude oil rail movements include shipments to and from Canada. The movement of US crude oil by rail had been falling since October 2014. It fell 27% month-over-month and 54.5% year-over-year.
Crude oil movement by PADD regions
The US crude oil movement by rail averaged at 404,000 bpd (barrels per day) in June 2016.
The EIA divides the US into five storage regions. The crude oil receipts to these regions for June are listed below:
- East Coast (or PADD1) receipts from the US and Canada were at 132,000 bpd in June 2016—compared to 433,000 bpd for the same period in 2015.
- Midwest (or PADD 2) receipts from the US and Canada were at 22,000 bpd in June 2016—compared to 20,000 bpd for the same period in 2015.
- Gulf Coast (or PADD 3) receipts from the US and Canada were at 98,000 bpd in June 2016—compared to 256,000 bpd for the same period in 2015.
- Rocky Mountain (or PADD 4) receipts from the US and Canada were 5,000 bpd in June 2016.
- West Coast (or PADD 5) receipts from the US and Canada were at 148,000 bpd in June 2016—compared to 174,000 bpd for the same period in 2015.
PADD 1, PADD3, and PADD 5 are the most active for crude-by-rail receipts. On the other hand, PADD 2 is the most active for rail shipments.
Impact on MLPs
The rise or fall in crude oil movements by rail influences midstream companies including Enterprise Product Partners (EPD), MarkWest Energy Partners (MWE), EQT Midstream Partners (EQM), and Genesis Energy (GEL).
The rollercoaster ride in crude oil prices impacts ETFs like the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the Vanguard Energy ETF (VDE), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), the Direxion Daily Energy Bear 3x (ERY), the VelocityShares 3X Inverse Crude Oil ETN (DWTI), and the SPDR S&P Oil & Gas Equipment & Services ETF (XES).
In the final part of this series, we’ll take a look at some crude oil price forecasts.