US crude oil movement by rail

The EIA (U.S. Energy Information Administration) reported that US crude oil movement by rail fell by 7,000 barrels to 12,115,000 barrels in July 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 has been falling since October 2014. It fell 0.1% month-over-month and 53.3% year-over-year.

US Crude Oil Movement by Rail Fell Slightly in July 2016

PADD-wise crude oil movement by rail

US crude oil movement by rail averaged at 391,000 bpd (barrels per day) in July 2016.

The EIA divides the US into five storage regions. The crude oil receipts for these regions in July are listed below:

  • East Coast (or PADD1) receipts from the US and Canada were at 177,000 bpd in July 2016—compared to 361,000 bpd for the same period in 2015.
  • Midwest (or PADD 2) receipts from the US and Canada were at 17,000 bpd in July 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 80,000 bpd in July 2016—compared to 277,000 bpd for the same period in 2015.
  • Rocky Mountain (or PADD 4) receipts from the US and Canada were 4,000 bpd in July 2016.
  • West Coast (or PADD 5) receipts from the US and Canada were at 111,000 bpd in July 2016—compared to 173,000 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 outgoing rail shipments. 

Impact on MLPs

The rise or fall in crude oil movements by rail influences midstream companies including EQT Midstream Partners (EQM), MarkWest Energy Partners (MWE), Enterprise Product Partners (EPD), and Genesis Energy (GEL).

Infrastructural availability or constraints can influence crude oil prices. Volatility 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 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.

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