May 31 (Bloomberg) -- Bakken oil on the spot market strengthened to the highest level in more than a week as refiners and midstream companies increase the use of rail to bring crude from the middle of the country to the coasts.
U.S. Class 1 railroads transported 97,135 carloads of crude, or about 762,000 barrels a day, in the first quarter, the Association of American Railroads said yesterday in a quarterly report. That’s up 20 percent from the previous quarter, and more than double the first quarter of 2012.
As recently as 2008, trains moved fewer than 19,000 barrels a day of crude. PBF Energy Inc. and Global Partners LP are among companies that invested in infrastructure to move crude from North Dakota’s Bakken shale formation, which has limited pipeline access. The region’s oil production climbed from 113,000 barrels at the end of 2008 to 719,000 barrels in March, according to the state’s Industrial Commission.
Bakken oil priced in Clearbrook, Minnesota, strengthened by $1.50 to a discount of $4.50 a barrel to the U.S. benchmark West Texas Intermediate crude in Cushing, Oklahoma, at 4:08 p.m. East Coast time, according to data compiled by Bloomberg.
Bakken’s discount to Brent, the European benchmark used to price foreign imports to the U.S., strengthened by $1.92 to $12.49 a barrel at 5:06 p.m.
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