Re: Falling oil prices will ease BNSF backlog?
Author: BOB2
Date: 12-16-2014 - 09:37

Yes, but probably not in the very short run, though.

These low oil prices will have much more impact on investment in and development of new fracking wells in the short term. But, large investments like these take a while to wind down. And, as has been noted, existing wells are producing based on "sunk costs" so unless oil falls under operating costs, you won't see these wells shut down, yet. What you are seeing already is a hold on new projects.

The lull is helpful in one way, it gives RR's and distribution systems more time, to add more facilities and capacity to accommodate the current high level of demand from existing fracking production. A slowdown in new fracking coming on line will most likely slow the rate of RR fracking traffic growth over the next couple of years.

Ironically, the current price of oil will do more than any of the political antics of the last few years to kill the proposed Keystone pipeline. It is designed to carry the very heavy Canadian crudes, which are very costly to produce, costly to ship, and costly to refine due to low yields, supposedly to be refined in Texas. This oil becomes very uncompetitive at these low prices, when compared with very "sweet" Bakken or nearby Permian fracking oils.



Subject Written By Date/Time (PST)
  Falling oil prices will ease BNSF backlog? EF Hutton 12-16-2014 - 00:31
  Re: Falling oil prices will ease BNSF backlog? J 12-16-2014 - 05:19
  Re: Falling oil prices will ease BNSF backlog? BOB2 12-16-2014 - 09:37
  Re: Falling oil prices will ease BNSF backlog? Fred 12-16-2014 - 11:38
  Re: Falling oil prices will increase demand and cause recession? BOB2 12-16-2014 - 16:11
  Re: Falling oil prices will ease BNSF backlog? Goober 12-16-2014 - 16:37
  Re: Falling oil prices will ease BNSF backlog? mook 12-16-2014 - 17:56
  Re: Falling oil prices will ease BNSF backlog? trainjunkie 12-16-2014 - 20:28
  Re: Falling oil prices will ease BNSF backlog? mook 12-20-2014 - 08:50
  Re: Falling oil prices will ease BNSF backlog? BN Oly 12-16-2014 - 21:45


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