Commodity traders retreat from moving Canadian crude by rail/ Kinder Morgan hits opposition

Exclusive: Glencore, traders retreat from moving Canadian crude by rail -sources

Reuters    By Nia Williams   CALGARY Alberta  10/20/14

 

Spot crude-by-rail volumes are down in Canada as traders and marketers including Glencore PLC are deterred by stronger heavy oil prices that have erased arbitrage opportunities to ship cheap crude from landlocked Alberta to higher-priced U.S. markets, industry sources said.

Since early August, heavy Canadian crude's discount to U.S. futures has narrowed to about half of what it was last year, barely covering rail shipping costs, mainly due to extra demand to fill Enbridge Inc's new pipeline to flow the Canadian glut to U.S. Gulf Coast refining hub.

The international commodities group Glencore no longer ships Canadian crude by rail, one industry source said. A Glencore spokesman declined to comment....

 .....marketers, who jumped into rail to exploit price arbitrage opportunities, are being replaced by producers and integrated refiners, such as Suncor Energy and Cenovus Energy.

These oil sands giants can afford to lose a few bucks on transport costs when the alternative is shutting in production or leaving crude stranded in Alberta.

 "The traders have been somewhat chased out of it," said Travis Brock, an executive at Strobel Starostka. "The producers have a long view. Even if it's not the best netback, they have made commitments to move some (crude) by rail and they will continue to do that.".... read more here

Kinder Morgan Canada pipeline plans hits a mountain of opposition

Reuters  10/21/14
VANCOUVER - A Western Canadian pipeline once seen as the best near-term hope for sending more of the country's controversial tar sands crude to Asia has hit another snag: aboriginal communities intent on using the courts to block the proposed expansion....