Interesting article. I’ve read a few that say this price differential is going to stick for a while. Wonder how much SOG is affected by it.
My second question is a bit simplistic I guess. If light crude can be shipped by rail for roughly the same price as pipeline, why would producers not do that and pickup the 20% price differential. It may have to do with previously signed contracts or rail car availability. Don’t know.
That said, if rail is viable, one would think that the federal and western provincial governments would be promoting this option as a cost effective way to open up Asian markets to Canadian crude. Hundreds of articles written on pipelines but I’ve only come across a handful on the rail option.
If anyone has read an article showing the costs for shipping light crude by rail vs pipeline, I would be very interested in seeing that.