55741
58711
A new report raises concerns about the number of lingering low-productivity firms in Canada.

'Zombie firms' won't die

A new report raises concerns about the number of lingering low-productivity firms in Canada.
56468
S&P/TSX
16194.86
-1.18
(-0.01%)
S&P-CDNX
719.71
-4.04
(-0.56%)
S&P-500
2907.09
+2.78
(0.10%)
NASDAQ
1166.00
-1.11
(-0.10%)
Dow
26442.41
+195.45
(0.74%)
Dollar
0.77283
+0.00242
(+0.31377%)
Oil
70.38
+0.79
(+1.14%)
Gold
1208.80
+5.90
(+0.49%)
Silver
14.300
+0.115
(+0.81%)


Crude-by-rail to cost more

An oil industry analyst says discounts being paid for western Canadian oilsands crude will remain at high levels because railroads are cranking up their crude-by-rail rates in return for providing railcars.

In a report, Barclays analyst Paul Cheng says he is increasing by US$4.50 per barrel his forecast for the difference between Western Canadian Select oilsands blend and U.S. benchmark West Texas Intermediate from 2019 to 2022, when new pipelines are expected to come on stream to relieve transportation constraints.

He says industry insiders are reporting that negotiations with rail operators have driven the expected cost of delivering a barrel of WCS by rail from Alberta to the U.S. Gulf Coast up to about US$20.

He says Barclays' forecast for the WCS-WTI differential for this year has therefore been raised to US$24.60 per barrel from US$18.40 per barrel — it was at about US$21.70 on Monday, down from peaks of nearly US$30 in February.

Both Canadian Pacific and Canadian National railways have said they will demand long-term take-or-pay contracts and higher rates to add trains and crew members to move oil because they fear the business will evaporate once new export pipelines come on stream.

The International Energy Agency said earlier this month it expects crude-by-rail shipments to more than double over the next two years as a lack of pipeline capacity forces Canadian producers to look to alternatives.

The Paris-based IEA forecasts crude-by-rail exports will grow from 150,000 barrels a day in late 2017 to 250,000 barrels a day this year and then to 390,000 barrels a day in 2019.



More Business News

59578
Data from CryptoCompare
Recent Trending
53300
Okanagan Oldies
59845
Castanet Proud Member of RTNDA Canada
58622
Press Room
52157
59599