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Analyzing US Crude Oil Movement by Rail in August

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Nov. 22 2016, Published 2:09 p.m. ET

US crude oil movement by rail

The EIA (U.S. Energy Information Administration) estimates that US crude oil moved by rail rose by 617,000 barrels to 13,133,000 barrels in August 2016—compared to the previous month. 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 rose 5% month-over-month, but fell 48.6% year-over-year.

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PADD-wise crude oil movement by rail

US crude oil movement by rail averaged 424,000 bpd (barrels per day) in August 2016.

The EIA divides the US into five storage regions. The crude oil receipts for these regions in August 2016 are listed below:

  • East Coast (or PADD1) receipts from the US and Canada were at 135,000 bpd in August 2016—compared to 419,000 bpd for the same period in 2015.
  • Midwest (or PADD 2) receipts from the US and Canada were at 24,000 bpd in August 2016—compared to 18,000 bpd for the same period in 2015.
  • Gulf Coast (or PADD 3) receipts from the US and Canada were at 121,000 bpd in August 2016—compared to 184,000 bpd for the same period in 2015.
  • Rocky Mountain (or PADD 4) receipts from the US and Canada were less than 5,000 bpd in August 2016.
  • West Coast (or PADD 5) receipts from the US and Canada were at 143,000 bpd in August 2016—compared to 193,000 bpd for the same period in 2015.

PADD 1, PADD 3, 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 Enterprise Product Partners (EPD) and Genesis Energy (GEL).

Infrastructural availability or constraints can influence crude oil prices. 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 PowerShares DWA Energy Momentum ETF (PXI), the Direxion Daily Energy Bear 3x ETF (ERY), 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 last part of this series, we’ll take a look at some crude oil price forecasts.

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