Gold Silver Reports (GSR) – Canada Oil Recovery Faces Threat From Potential Rail Strike — On Tuesday, the Teamsters Canada Rail Conference and the International Brotherhood of Electrical Workers each gave Canadian Pacific a 72-hour strike notice informing the company of their plans to strike at 12:01 a.m. eastern time on April 21.
A strike would come at a critical time for Western Canadian oil producers. The heavy crude they pump is selling for $16.60 a barrel below the U.S. benchmark, from a discount of more than $30 in February. Oil flows out of Alberta to the U.S. have improved after pipeline and rail bottlenecks earlier in the year stymied exports.
“Any reduction in rail capacity would not be good,” Kevin Birn, a director at IHS Energy in Calgary, said by phone. “A rail strike would stretch or constrain CP, one of the major rail lines, at a time when its most needed.”
New heavy oil production from Suncor Energy Inc.’s Fort Hills mine, combined with reduced pressure on the TransCanada Corp.’s Keystone pipeline after a November spill filled remaining export lines to capacity this year, forcing producers to ship by rail as an alternative. But the rail companies were also constrained by heavy demand for grain shipments and cold winter weather that slowed trains. – Neal Bhai Reports (NBR)
